“The Senate voted 52-48..to overturn a Consumer Financial Protection Bureau rule capping the overdraft fees that banks can charge, in another blow to the beleaguered agency.
The resolution under the Congressional Review Act now heads to the House, where the Financial Services Committee approved a companion bill on a 30-19 vote earlier this month. CRAs both invalidate regulations and preclude future administrations from introducing “substantially similar” proposals.”
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“The Biden administration finalized the overdraft rule — part of its campaign against so-called junk fees — in December, to the chagrin of Republicans who had asked financial regulators to pause rulemaking after the election until the new administration was sworn in. Banks, which say the rule would limit their ability to offer overdraft coverage, fiercely opposed the regulation and sued to stop it hours after it was finalized.”
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“Under the rule crafted by former CFPB Director Rohit Chopra, banks and credit unions with more than $10 billion in assets would have three options when a consumer overdraws their account: charging $5; charging a fee that covers no more than costs or losses; or disclosing the terms of a profit-generating overdraft loan as they would with other loans.
Sen. Josh Hawley (R-Mo.), the lone Republican to vote against overturning the rule, said the regulation would “save the average working class household something like $265 a year.”
“I do not want to give big banks the ability to charge people outrageous sums of money,” Hawley said. “Under this… they can charge whatever their expenses are on an overdraft, and if that’s more than $5 per overdraft, they’re allowed to charge that, but they’re not allowed to charge anything more.”
Banks currently charge an average fee of $35 to extend overdraft services. The CFPB estimated the rule would save consumers $5 billion in fees per year.”