Republicans overturn CFPB’s 2024 rule limiting overdraft fees
— I missed this story when it happened, and became aware of it a few days ago. —
Republican Senator Tim Scott, with House Financial Services Committee Chairman French Hill, introduced a Congressional Review Act (CRA) resolution to reverse the CFPB’s rule limiting overdraft fees to $5. The Senate voted down party lines, 52—47, with Republican Josh Hawley joining the Democrats in voting no. There was a similar result in the House of Representatives, with a vote of 217—211. President Trump signed the resolution into law on May 9, 2025, making the already struggling poor even poorer.
Who do you think Senator Scott’s top donor is? Yes, it’s a bank, Goldman Sachs, that bribed Scott to the tune of $174,975 between 2019 and 2024. Of Course, these contributions don’t influence his actions in Congress, right? At this point, there cannot be many people in the United States who believe this bullshit! Scott, like the vast majority of Congress, represents their donors’ interests, not their constituents.
Senator Scott’s argument is that if banks are limited in the fees they can charge for overdrafts, it will be detrimental to consumers, thereby restricting their access to credit. From my understanding of Scott’s statement, he is saying that without the poorest in our nation being charged up to $35 per overdraft transaction, banks won’t have the funds to give lines of credit, or even offer banking services.
I have seen comments on social media suggesting that it is the consumer’s own fault for going overdrawn, that they should spend within their means, or that they need to manage their money better.
It doesn’t matter how well you manage your money; you can still go overdrawn for any number of reasons, including, but not limited to, charges disappearing from your statement after a purchase. QuikTrip does this all the time; the charge appears initially, then disappears, to reappear 2 days later. Recurring card payments being taken before the agreed date, which includes being charged more than the agreed amount, or a check that you wrote 89 days ago gets cashed when you don’t have the funds to cover it. These are just a few that we have personally fallen afoul of, and I’m very anal about my finances.
It’s genuinely a vicious cycle; each time people are charged an up to $35 fee, they have less money to spend in the next pay period, meaning overdrafts are utilized sooner and sooner each pay period.
So, here’s my solution: Congress needs to pass the following laws:
- Require that overdrafts be explicitly applied for, complete with a credit check, like a loan or credit card.
- Eliminate ‘pending charges’, in a digital world, there is no need for pending charges, which can disappear and reappear later; it should immediately clear if you have the funds available, or be rejected if you don’t.
- Require that all checks be presented within seven days of the check date.
However, that would hurt the bank’s bottom line, so it won’t happen.