Sen. Tim Scott And A Band Of Republicans Vote To Make Banking Overdraft Fees Great Again

Under President Joe Biden, the Consumer Financial Protection Bureau (CFPB) instituted a $5 cap on bank overdraft fees.

Senate Republicans have voted to let banks take advantage of Americans by repealing the cap on overdraft fees, thanks to legislation put forward by Sen. Tim Scott.

Under President Joe Biden, the Consumer Financial Protection Bureau (CFPB) instituted a $5 cap on bank overdraft fees. Thursday, Senate Republicans voted 52-48 in favor of legislation that would repeal the cap for banks.

Scott, the chairman of the Senate Banking Committee, argued for the resolution on the Senate floor, saying that removing the CFPB’s cap would be “good for consumers.”

The only Republican who voted no and joined Democrats in opposing the resolution said, “Why would we help the big banks at the expense of working people?”

Consumer advocates are just as baffled.

“The CFPB’s rule imposes reasonable limits that protect consumers from unfair fees while enabling banks to cover their costs,” Chuck Bell, advocacy program director at Consumer Reports, told Bloomberg. “Repealing the CFPB’s overdraft fee limits will hurt working families who are already struggling with high prices and inflation.”

While this is bad news for consumers and most Americans, banks are celebrating. The American Bankers Association filed a lawsuit in December, alleging that the CFPB overstepped its authority. While then-CFPB Director Rohit Chopra said the cap on overdraft fees would save consumers $5 billion a year, the association argued the cap actually hurts consumers, Rolling Stone reports.

Republicans Signal That CFPB Will Be Eliminated

The move from Senate Republicans signals something darker under the Trump administration: the CFPB could be no more.

In February, billionaire Elon Musk, head of the highly criticized Department of Government Efficiency (DOGE), wrote on X, “CFPB RIP.”

Musk, who has been tasked with cutting U.S. government jobs and federal spending under DOGE, said in a follow-up post that the CFPB “did above zero good things” but “still needs to go.”

Now that the resolution has passed in the Senate, it heads to the GOP-led House.

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