The Senate voted Thursday to strike down a rule capping most financial institution overdraft charges at $5, a measure adopted late final 12 months by the Client Monetary Safety Bureau that had been anticipated to save lots of People billions of {dollars} per 12 months.

Senator Josh Hawley, Republican of Missouri, was the lone Republican to oppose the decision, which handed on an almost party-line vote, 52-48. It’s going to now transfer to the Home, the place Consultant French Hill, the Arkansas Republican who leads the Monetary Service Committee, launched a parallel decision final month.

The rule would have restricted the charges banks and credit score unions might cost when prospects spend greater than they’ve of their accounts, sometimes $35 per overdraft. The bureau estimated it will save American households $5 billion a 12 months. It was instantly challenged in court docket by banking commerce teams.

The decision was performed by means of the Congressional Evaluate Act, a 1996 legislation that allows lawmakers to reverse not too long ago adopted laws with a easy majority vote. It can’t be filibustered. The overdraft rule, which the patron bureau finalized in December after years of preparatory work, was scheduled to take impact in late 2025.

Democrats are getting ready to combat the decision within the Home, the place they hope the slim Republican majority will work of their favor.

The American Bankers Affiliation, a plaintiff within the lawsuit, praised the Senate’s motion.

“If carried out, the C.F.P.B.’s Eleventh-hour rule imposing authorities worth controls would drive many banks to restrict or get rid of overdraft safety as we all know it,” stated Rob Nichols, the commerce group’s chief government. “Many People can be pushed to much less regulated and better danger non-bank lenders to cowl sudden or emergency bills.”

Client advocates stated the rule’s elimination would enable banks and credit score unions to proceed charging charges far increased than their precise prices for the service.

“Repealing the C.F.P.B.’s overdraft price limits will harm working households who’re already combating excessive costs and inflation,” stated Chuck Bell, the advocacy program director at Client Stories.