Independent Community Bankers of America (ICBA) President and CEO Rebeca Romero Rainey has expressed strong opposition to the Consumer Financial Protection Bureau’s (CFPB) new rule on overdraft services. Although the rule exempts community banks with assets under $10 billion, ICBA remains concerned about its broader implications.

Romero Rainey stated, “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.”

She highlighted that community banks offer various products to help customers manage overdrawn accounts. These include overdraft programs, free ad hoc solutions, account alerts, and transfers. The CFPB's restrictions could negatively impact customers who rely on these services by causing 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,” she added. She also warned that limiting access to overdraft services might push consumers towards payday lenders.

ICBA argues that the CFPB's rule exceeds its statutory authority under the Truth in Lending Act and violates existing regulations regarding overdrafts. Romero Rainey called on incoming policymakers to overturn what she termed as "faulty rulemaking."

“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,” she said.

The ICBA is committed to supporting community banks through advocacy, education, and innovation. More information about their efforts can be found at icba.org.