The Trump Administration is trying to overturn a new consumer protection rule
The fate of a new regulation that protects consumers from high overdraft checking fees is expected to come up for a vote in the House tomorrow. The Senate has already voted to throw out the rule and leave consumers vulnerable to overdraft fees of $40 or more.
Also on the chopping block is a new rule that wouldmake payment apps like Venmo, Google Pay and AppleCash better protect consumers money and private data.
The new protection measures were instituted by the "old" Consumer Financial Protection Bureau during the Biden era. The "new" CFPB, which has been drastically downsized by the Trump Administration, opposes the rules, saying that if banks have to be fair to consumers, they will have to charge higher interest rates.
Consumer advocates are urging House members to stand with consumers and reject both measures. It's a little confusing to keep track of, as is often the case in Washington, but basically a "yes" would repeal the consumer protection rules, since it would approve a resolution blocking the new protection measures.
Consumer Reports is among the organizations urging House members to reject the measures. SeeCRs letter to the House urging lawmakers to reject H.J. Res 59.
H.J. Res 59seeks to repeal the CFPBs rule that limits excessive bank overdraft fees. The CFPBs rule would make sure that large banks and credit unions charge around $5 for an overdraft, so its more in line with the cost of an overdraft, rather than allowing them to gouge customers and pad their profits with billions of dollars in charges.
The second measure,H.J. Res 64,blocks the CFPBs rule that would enable the Bureau to make payment apps like Venmo, Google Pay and AppleCash better protect consumers money and private data. If the rule is killed, it will block the CFPB from being able to conduct routine examinations of big tech payment app providers, just like it is currently able to do with banks and credit unions.
California Attorney General Rob Bonta has also weighed in on the overdraft measure.
California Attorney General Rob Bonta today issued a statement after Congress overturned a Consumer Protection Financial Bureau (CFPB) rule that would have limited overdraft fees to $5. Currently, banks usually charge $35 for an overdraft. The rule wasexpected to have saved Americans billionsof dollars eachyear.
Let me be clear:by allowing big banks to chargehigh overdraft fees, Congress is paving the way for wealthy banks to get wealthier, and for workingclass people to be squeezed even further, Bonta said.
Overdraft fees can lead to substantial financial losses for families and turn setbacks into crises. California consumers paid an estimated $200 million in overdraft fees in 2022, with the financial burden disproportionately falling on low-income consumers and consumers of color, he said.
Meanwhile, financial institutions nationwide generated over $7.7 billion in revenue from overdraft fees and non-sufficient fundsfeesin 2022.
Posted: 2025-03-31 18:28:20
