The leaders of the congressional committees overseeing the financial services sector have introduced a resolution to overturn a Consumer Financial Protection Bureau rule capping fees for overdraft services.
The Congressional Review Act resolution would overturn a Biden-era rule that requires banks with at least $10 billion in assets to cap overdraft fees at $5 unless they voluntarily set a cap that covers their actual costs and losses or treat overdraft protection as a loan covered by the Truth in Lending Act. The Senate resolution is sponsored by Senate Banking Committee Chairman Tim Scott (R-S.C.) while the House version is sponsored by House Financial Services Committee Chairman French Hill (R-Ark.). Both resolutions have multiple cosponsors.
The overdraft rule was part of a Biden administration campaign against so-called “junk fees.” The American Bankers Association last year joined the Mississippi Bankers Association and associations representing bankers and credit unions in challenging the rule in court. In a statement, ABA President and CEO Rob Nichols thanked both chairmen for seeking “to overturn the CFPB’s misguided overdraft rule.”
“This rule — finalized in the eleventh hour of the last administration — reverses 55 years of regulatory precedent by the agencies charged with enforcing it and the courts,” ABA said. “More importantly, it will harm rather than help consumers by limiting access to a service they value and appreciate. This flawed rule exceeds the bureau’s statutory authority, and this CRA resolution presents an important opportunity to stop it.”
