Republicans continue attack on CFPB; latest effort may raise bank overdraft fees

Virginia Organizing is asking members of Congress to support working families over big banks by keeping bank overdraft fees capped at $5.

With the Trump administration’s attack on the Consumer Financial Protection Bureau, Congress is looking to roll back rules including one put in place by the Biden administration lowering bank overdraft fees to $5. Before this protection was put in place, many banks were charging $35 for overdraft fees. The banking industry has long fought efforts to disclose what banks make off overdrafts and has pushed Congress to nullify the new caps.

Republicans are spinning the overdraft conversation by saying that the limits are resulting in more returned checks by the bank. Instead of covering the overdraft and charging the lower fee, they argue, banks are simply returning checks marked insufficient funds. Conservative lawmakers want consumers to believe that the lower overdraft rates actually hurt low-income households.

The Senate voted 52-48 today to overturn the rule capping the overdraft fees at $5.

Virginia Sens. Mark Warner and Tim Kaine both voted against the resolution and are in favor of keeping overdraft fees at $5.

“Senators Kaine and Warner voted to stop big banks from picking Virginians’ pockets by jacking up junk fees,” said Brian Johns with Virginia Organizing. “Our representatives should reject this assault on working families’ budgets and stand with the people trying to make ends meet, not with big banks protecting their profits.”

The fate of the resolution under the Congressional Review Act now lies with the House, and Virginia’s 11 members of Congress will play a critical role on the future of the measure. Virginia Organizing, Americans for Financial Reform and nearly 300 organizations across the country, including Virginia Citizens Consumer Council, Virginia Interfaith Center for Public Policy, Virginia Poverty Law Center and Legal Aid Works, sent a letter to senators in opposition to the resolution to overturn the CFPB overdraft fee rules.

“Lawmakers who vote to roll back the CFPB’s new caps on overdraft fees are throwing their constituents under the bus for the sake of higher profits at big banks,” said Kimberly Fountain, consumer financial justice manager at Americans for Financial Reform. “The Senate may have spoken, but the House should reject this effort by Wall Street banks to hike overdraft fees on their constituents. Members should vote against these awful junk fees.”