Republicans Are About To Gut Consumer Protections

The two Congressional Review Act resolutions now go to President Trump.

By David Dayen, The American Prospect

The House of Representatives passed resolutions Wednesday that will nullify two Consumer Financial Protection Bureau (CFPB) rules. As a result, low-income customers will pay an estimated $5 billion more annually in overdraft fees, and Big Tech will get to pursue its ambitions to make payment apps and other financial services products with little regulatory oversight.

The resolutions, which have already passed the Senate and will now head to President Trump, use the powers under the Congressional Review Act to reverse regulatory actions taken by executive branch agencies submitted after a certain date. Once passed, the CRA resolutions both nullify the rule and prevent agencies from taking “substantially similar” actions in the future. President Trump signed 16 CRA resolutions in his first term, and two so far in 2025.

The overdraft fee rule would have capped the fees, charged when customers attempt to withdraw more from their account than they have deposited, to $5. The average overdraft fee is closer to $35. The so-called “larger participant” rule gave the CFPB supervisory authority over non-banks engaged in digital payment app transactions, including companies like Elon Musk’s X, which has eagerly moved toward developing a financial services app.

All House Republicans decided to reveal themselves as objectively pro-junk fee in supporting blocking the overdraft fee rule; only Rep. Ryan Mackenzie (R-PA) voted against the larger participant rule. Sen. Josh Hawley (R-MO) voted against both resolutions in the Senate, but no other Senate Republican did.

The overdraft fee rule was predicted to save Americans $5 billion per year, weighted overwhelmingly to poorer bank customers who are at risk of overdrawing their accounts. Bank lobbyists were unsurprisingly cited as the primary endorsers of killing the rule. For years, banks have been found to structure payments to generate more money from overdraft fees.

Republicans have justified overturning the overdraft fee rule by saying they want to protect consumer choice, an old fallacy that banks have to rip off their customers or they cannot survive. Yet former CFPB director Rohit Chopra’s pressure on larger banks led to many dropping their overdraft fees entirely.