ICBA Strongly Opposes CFPB Overdraft Rule

Washington, D.C. (Dec. 12, 2024) — Independent Community Bankers of America (ICBA) President and CEO Rebeca Romero Rainey today issued the following statement on the Consumer Financial Protection Bureau’s final rule on overdraft services.

“Despite the CFPB overdraft rule’s exemption for community banks under $10 billion in assets, ICBA and the nation’s community bankers remain deeply concerned that this rule will have unintended consequences on all institutions and the consumers and local communities they serve.

“Community banks provide a wide range of products and services in a competitive marketplace that customers may select to address situations in which they’ve overdrawn their account, including overdraft programs, free ad hoc solutions, alerts about their account status, account transfers, and more. If enacted, the CFPB’s restrictions would have a negative ripple effect on customers and businesses that rely on overdraft services by causing them to experience the harsh realities of rejected payments.

“The rejection of a payment for a life-saving medical need, or the rejection of payroll payments for a small business’s employees, are just two examples of the significant impact these punitive policies would have. Further, cutting off access to overdraft services would force consumers to rely on payday lenders and other unscrupulous funding sources, harming the consumers this rule intends to help.

“ICBA continues to strongly oppose the CFPB’s overdraft rule, which exceeds the bureau’s statutory authority under the Truth in Lending Act, violates existing regulations that have determined overdrafts are not extensions of credit, and was released at the 11th hour of the outgoing administration. We call on the incoming administration and Congress to overturn this faulty rulemaking, which will have a detrimental impact on consumers who rely on this service, to ensure continued access to overdraft services. And we look forward to continuing to work with policymakers to minimize the negative impact of this and other CFPB policies on consumers and local communities.”

About ICBA

The Independent Community Bankers of America® has one mission: to create and promote an environment where community banks flourish. We power the potential of the nation’s community banks through effective advocacy, education, and innovation.

As local and trusted sources of credit, America’s community banks leverage their relationship-based business model and innovative offerings to channel deposits into the neighborhoods they serve, creating jobs, fostering economic prosperity, and fueling their customers’ financial goals and dreams. For more information, visit ICBA’s website at icba.org.