WASHINGTON — The Senate Thursday voted to overturn the Consumer Financial Protection Bureau's overdraft rule that would cap the overdraft fees that many banks can charge customers at $5.
The full Senate voted 52-48 to pass the Congressional Review Act resolution. The measure also needs to be passed by the full House with a simple majority — which it is expected to do with Republican support alone — and will then go to the desk of President Donald Trump.
Sen. Josh Hawley, R-Mo., was the
House Financial Services Committee Chairman Rep. French Hill, R-Ark.,
Nullifying the overdraft rule means that the CFPB cannot undertake a substantially similar rulemaking, which likely means that the bureau can't pursue any kind of overdraft rule.
"To do the right thing for the working class is to give them all the options and let them decide," Senate Banking Committee Chairman Tim Scott, R-S.C., said. "Trust them with their own resources."
Democratic lawmakers argued against the resolution, arguing that repealing overdraft caps would raise costs for consumers.
Sen. Chris Van Hollen, D-Md., pointed to the Department of Government Efficiency, or DOGE, and Elon Musk's role in the Trump administration's attempt to dismantle the bureau and its rules.
"I find it just gross that the richest man in the world would go after a bureau whose purpose it is to help return money to American consumers who've been cheated out of their hard earned dollars," Van Hollen said.
The Democratic lawmakers said that overturning the rule would cost consumers while enriching banks.
"Altogether, the CFPB rule saves American families up to $5 billion a year. Republicans claim they care about lowering costs," said Sen. Elizabeth Warren, D-Mass., ranking member of the Senate Banking Committee. "But overturning this rule will make big banks richer and hard-working families poorer."
Bank lobbying groups immediately applauded the vote.
"If implemented, the CFPB's eleventh-hour rule imposing government price controls would force many banks to limit or eliminate overdraft protection as we know it," said Rob Nichols, the American Bankers Association president and CEO in a statement. "In adopting the rule, the Bureau ignored the majority of Americans who have consistently said they value the service and think it's reasonable for banks to charge a fee for overdrafts."
The Consumer Bankers Association also urged the House to quickly move on the resolution.
"This effort to invalidate the Chopra CFPB's overdraft rule underscores the serious concerns lawmakers have about how this Biden-era rule will negatively impact millions of Americans' ability to manage their own finances and the long-term damage that government-imposed price controls have on a highly-competitive financial services market," said Lindsey Johnson, CBA president and CEO in a statement.
Consumer advocate groups decried the CRA resolution.
"Too many banks and credit unions pad their profits by charging excessive overdraft fees that make it harder for economically vulnerable consumers to make ends meet," said Chuck Bell, advocacy program director at Consumer Reports. "The CFPB's rule imposes reasonable limits that protect consumers from unfair fees while enabling banks to cover their costs. Repealing the CFPB's overdraft fee limits will hurt working families who are already struggling with high prices and inflation."
