House Republicans appear ready to start the Congressional Review Act (CRA) process to attempt to repeal the Biden Administration’s controversial overdraft rule.

The rule is scheduled to go into effect Oct. 1, but Acting CFPB Director Scott Bessent has ordered a halt to all work at the agency, and a suspension of the effective dates for all rules that have not yet taken effect, so it is unclear when the overdraft rule might take effect.

If allowed to go into effect, however, the rule could limit overdraft fees to $5 at financial institutions with more than $10 billion in assets.

During a hearing on Feb. 5, Republicans on the House Financial Services Committee presented a draft CRA resolution to nullify the overdraft rule. (The CRA would allow Congress to nullify the rule by a simple majority vote in the House and Senate approving a resolution that is then signed by the President.)

The resolution was included in a list of legislative proposals that Committee Chairman Rep. French Hill, R-Ark., included at the start of a hearing on the state of community banking. “We have attached several discussion drafts that will lay the groundwork for a series of conversations and hearings this Committee will lead throughout the 119th Congress to improve the regulatory landscape and provide solutions to the many challenges faced by community banks,” Hill, a former community banker said, in a statement.

Committee ranking Democrat Rep. Maxine Waters, D-Calif., objected, saying that Trump Administration proposals are designed to make the rich richer. “If the community banks listening today aren’t worried about what’s happening to their customers and small business clients, they should be,” she added.

During the hearing, Cathy Owen, Chair, President & CEO of State Holding Company and Executive Chair of Eagle Bank & Trust Company in Little Rock, Arkansas, said that even though the rule was designed to require only financial institutions with more than $10 billion in assets to limit their overdraft fees, market pressures will mean that even smaller financial institutions will have to comply with it.

“If not invalidated, the rule would effectively bring an end to overdraft services for millions of consumers who – following receipt of a consumer-tested disclosure – choose to use the product to cover emergency expenses and other liquidity shortfalls, all to advance the prior administration’s political campaign against so-called junk fees,” said Owen, who was testifying on behalf of the Arkansas Bankers Association and the American Bankers Association.

However, Mitria Wilson Spotser, Vice President of Federal Policy at the Center for Responsible Lending (CRL), called on the committee to go beyond issues that she alleged would allow community banks to advance their own interests.

“Rather than allow large financial institutions to advance their own interests under the guise of improving the business environment for community lenders, CRL urges the committee to devote its attention to the important, and often bipartisan, policy opportunities that exist which can actually help community banks be greater,” she said.