[Congressional Record Volume 171, Number 55 (Wednesday, March 26, 2025)]
[Senate]
[Pages S1848-S1853]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
Consumer Financial Protection Bureau
Mr. VAN HOLLEN. Mr. President, the bill that Senate Republicans have
brought to the floor today and which we will vote on sometime soon is
the latest example of the ``great betrayal'' in action.
On the campaign trail, Candidate Donald Trump promised that he was
going to help Americans deal with their pocketbook issues, kitchen
table issues, and he said that on day one--day one--he was going to
bring prices down; that he was going to bring down costs for American
families. Well, costs are going up, and President Trump and Republicans
are taking actions that will raise those costs on the American people
even further, and today's bill is exhibit A.
I want to take a step back and put this bill that we are considering
today in context. You know, one of the infuriating experiences that so
many American consumers have is the mountain of junk fees they face.
These are hidden fees that are sometimes in very fine print in
contracts. They are all these fees that get added to their bills, where
they really have no idea what additional value they are getting for
those fees because often there is no additional value for that fee or
that the additional value is minuscule in comparison to the fee they
are being charged. So people pay these fees and grind their teeth and
essentially get ripped off. We also see many predatory lending
practices, where financial interests prey on those who are living
paycheck to paycheck.
So, years ago, after the financial crisis of 2008, Congress created
the Consumer Financial Protection Bureau--also known by its shorthand
CFPB--to help protect American consumers from a whole range of
predatory practices. Senator Warren was one of the people who thought
of establishing that important consumer protection Agency. Now she is
the ranking Democrat on the Banking and Housing Committee, on which I
am privileged to serve.
Since its creation, the CFPB has gone after all sorts of fraudsters,
all sorts of con artists, all sorts of people who try to find different
ways to cheat American consumers out of their hard-earned money. They
have been successful, the Consumer Financial Protection Bureau. They
have returned over $21 billion to American consumers who have been
cheated out of their hard-earned money. In other words, they brought
lawsuits to go after these fraudsters or changed practices in order to
make sure that people could keep more of their hard-earned money. That
includes $71 million that was returned to my constituents in the State
of Maryland who were ripped off.
Along the way, the CFPB made some powerful enemies, and many
Republicans have been trying to dismantle the CFPB for years. Now they
have Elon Musk to help do their dirty work.
[[Page S1849]]
In one of the most corrupt bargains in American history, Elon Musk
spent $280 million to help elect Donald Trump, and Donald Trump has
turned around and given Elon Musk the keys to many Federal Agencies.
Make no mistake, this has nothing to do with making the Federal
Government more efficient and has everything to do with rigging the
government to serve people like Elon Musk at the expense of everybody
else in America. In fact, one of the great examples of that is that
they went right after the Consumer Financial Protection Bureau.
I find it just gross that the richest man in the world would go after
a Bureau whose purpose it is to help return money to American consumers
who have been cheated out of their hard-earned dollars, but that was
one of the very early targets of Elon Musk and his DOGE cronies.
Now, apparently, that wasn't enough. It was not enough just to go
after and try to dismantle that Agency. That step and the one we are
dealing with here in the Senate today is an effort to go back and undo
some of the important consumer protections that the CFPB put in place
under the Biden administration.
One of those protections was a rule that is in place now to prevent
banks from charging consumers exorbitant fees when a consumer overdraws
their account balances using a debit card.
So how does this work? Well, let's say you have got your debit card.
You go into the grocery store. You are going to buy some groceries for
the family. You use your debit card to pay, and you overdraw your
account. Now, some of the biggest banks in the country will typically
charge you $35 for each of those overdrafts no matter how big your
overdraft amount is. So you overdraw your account by one buck, $35; by
5 bucks, $35.
The average overdraft amount is $26. So you can see on each one of
those transactions those banks are making a hefty return. In fact, it
is like a loan with an APR of 16,000 percent. And it happens time after
time. In other words, you leave the grocery store. You go pick up your
kids at school. You go to a local convenience shop. You get a cup of
coffee. You pay with your debit card, and--boom--you get hit with
another $35 overdraft fee. And on and on and on.
In fact, every year, some of the biggest banks--Wells Fargo and
Chase--make over $1 billion from consumer overdraft fees. And some of
these banks have built an entire system to try to maximize the amount
they get from their consumers through these overdraft fees. If you look
collectively at the banking system, this is a $5 billion-a-year rip-
off.
So if you look at the people who are being primarily hit by this, not
surprisingly, it is people who are living paycheck to paycheck--in
fact, many of the people who Candidate Trump said he wanted to look out
for when he was campaigning in the last election.
If you look closely, you will find that 79 percent of overdraft fees
are charged on about 9 percent of accounts. These are accounts where
people have an average balance of around $350. So these big banks are
preying on the people who literally are going paycheck to paycheck. And
for those households, the average hit every year is about $225 in
exorbitant fees. So you make a tiny miscalculation, and you get hit
hard by these predatory practices.
Last year--this last year--the Consumer Financial Protection Bureau--
the one that Elon Musk and DOGE are trying to shut down as we speak--
last year, they developed a rule to help protect consumers. It was
something many of us had pushed for years, and we were glad to see them
do it.
The rule was pretty straightforward. It would cap the overdraft fees
at $5 a time instead of $35 a time. And it would also require banks to
be transparent in their pricing and their overdraft penalty structure
so that consumers would know and have eyes wide open as to what
penalties they were going to incur. So you wouldn't have people
inadvertently hit with 35 bucks for a cup of coffee, 35 bucks when you
go pick up some more groceries.
This has become a way for some of the biggest banks to rip off
consumers, especially those who are going paycheck to paycheck, as I
said, to the tune of $5 billion.
So that is the rule. That is what the CFPB did, pretty simple
measure: Make sure that consumers don't get ripped off and not even
know they are being ripped off sometimes until they know about the
overdraft fee.
What Republicans have brought to the floor today is a proposal to
override that consumer protection bill to allow those banks to continue
to collect $5 billion from American consumers, so many of them who are
living paycheck to paycheck.
Everybody should know that that is what is going on here. We have got
the richest man in the world trying to shut down an Agency that was
created to help protect consumers, and here in the Senate, we have
Senate Republicans trying to overturn a consumer protection rule that
saves working people a little bit of money and makes sure that they
don't get slammed for making a small overdraft on their accounts.
I urge my colleagues to vote to uphold the consumer protection law
that was adopted. If you want to vote yes to protect the rule, you vote
no on this effort to overturn it. I urge my colleagues to vote no.
I yield the floor.
The PRESIDING OFFICER. The Democratic whip.
Mr. DURBIN. Mr. President, I want to thank my colleague from Maryland
for his excellent presentation.
This is an issue which people with little money in the bank never
think about. People who are living paycheck to paycheck don't have a
big savings account, don't have anywhere to turn. They are the ones who
are penalized by the discussion we are having today and certainly ought
to pay attention to this debate.
It is hard to believe that recent polls show that consumer confidence
in the economy has dropped to its lowest level in 12 years. This comes
after President Trump made campaign promise after campaign promise to
lower prices on day one. Remember that? He said: We are going to ``make
America affordable again.'' But working families in America have not
seen any relief; actually, just the opposite.
A month ago, President Trump, turning to his billionaire buddy--the
unelected Elon Musk--tried to, in Musk's description, ``delete'' the
Consumer Financial Protection Bureau.
I know a little bit about that Bureau. I was one of the original
sponsors of the legislation creating it. The idea was to have one
Agency of government on the side of the consumer that was willing to
look out for rip-offs and to fight, if necessary, to protect the
consumers.
Of course, that is the last thing in the world that Elon Musk and
Donald Trump want to see. They are the folks who want to make sure that
the big banks and the big corporations are not held accountable, so off
they went with their DOGE operation for the Consumer Financial
Protection Bureau.
This Agency stood up to Wall Street to protect consumers when they
had nowhere else to turn. And, now, today, hard to believe--hard to
believe--my Republican colleagues want to go a further step to strip
consumers of protections that went to the benefit of the big banks.
They want to gut a rule from the Consumer Financial Protection Bureau
that would cap overdraft fees.
Currently, consumers are charged on average $35 in overdraft fees per
transaction. So you write a check for one of your expenses, and it
turns out there is some miscalculation along the way, and you don't
have the money in your checking account to cover it. That is an
overdraft. Well, the charge for that overdraft is $35 currently, on
average. It doesn't matter how big or how small you overdrew your
checking account.
If a consumer purchases a product one cent over the amount in their
checking account, an extra $35 is tacked on to the transaction in
overdraft fees.
According to the Federal Reserve, nearly 40 percent of Americans
would have trouble covering an emergency $400 expense. Forty percent of
Americans do not have more than $400 in cash available to them. For
those households, a $35 overdraft fee would be the difference between
just making it or falling behind a little bit that day.
The CFPB's rule would cap these fees at 5 bucks unless the bank can
demonstrate that its costs to run overdraft services are actually
higher. This would save Americans up to $5 billion a year, from $35 on
average to $5 for
[[Page S1850]]
overdraft fees or $225 for each household that pays overdraft fees.
The rule only applies to banks and credit unions that have more than
$10 billion in assets. That is about 130 of the biggest banks. So the
community banks--the ones which you probably do a lot of business
with--that sponsor the hometown Little League team or help support
local charities, this rule would not apply to them. The bank has to
have a value of more than $10 billion in assets to be covered by this
$5 limitation.
What are some of the banks that are involved? JPMorgan's profits last
year were $54 billion--JPMorgan, $54 billion; Bank of America's
profits, $25 billion; Wells Fargo's profits, $20 billion. Let me draw a
distinction. In 2024, JPMorgan and Wells Fargo both charged more than
$1 billion in overdraft fees. However, Bank of America has capped its
overdraft fees to 10 bucks. They still made incredible profits to the
tune of $25.5 billion. When you crunch the numbers, the big banks'
arguments that they absolutely need to charge people these outrageous
fees just don't hold up.
That is why I am voting no on this offering to oppose the resolution
that would overturn this rule that caps overdraft fees and helps
everyday Americans.
I do want to commend the banks that are at least trying to help the
consumers. Citigroup and Capital One have ceased overdraft fees, and
Bank of America has capped its overdraft fee at $10, underscoring how
banks can continue to operate profitably--very profitably--without
relying on these fees.
So I am going to oppose this offering by Senator Scott of South
Carolina on this overdraft lending fee. I think when it gets right down
to it, you have to ask yourself: Is it really costing the banks that
much money for an overdraft? If it is, they can charge the consumer.
But to automatically penalize them in this way is fundamentally unfair
for a lot of people who are struggling. You can talk a lot about the
cost of a dozen eggs, but I will tell you what, even a dozen eggs
doesn't cost a $35 fee that has been the usual charge in penalty for
anyone who overdraws their account. So if you are on the side of the
consumers and the families who are struggling with the cost of living,
oppose this effort by Senator Scott of South Carolina.
I yield the floor.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. BOOKER. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BOOKER. Mr. President, this is an overdraft speech. It is about a
commonsense rule that lowers costs for millions and millions of
Americans, while carefully targeting, really, the most egregious
abusive overdraft practices in the financial industry today.
Banks have long offered overdraft services to allow their customers
to make purchases or even pay a bill, even if they lack sufficient
funds in their account, while sometimes charging a fee for this
service. But in recent years, banks have exploited this practice,
charging customers billions of dollars in deceptive fees. A recent
study found that more than half of all the people who overdraw their
checking accounts and paid a fee could not recall consenting to the
overdraft service for which they are being charged.
Moreover, we know the customers who are being charged overdraft fees
are overwhelmingly folks who are low-income, who work really hard and
don't get that much pay, and a $20 overdraft fee just further pushes
them into a financial trap, into this cycle downward of financial
instability that is hard to pull out of.
Too often, banks have been found trying to game the system, and this
is really problematic. They try to game the system to impose fees on
customers--even when they shouldn't be charged in the first place--by
orchestrating transactions improperly or delaying deposits customers
make into their accounts.
Just think about this. They can time your deposit with the time it
hits your account. You think you can deposit a check and pull money
out, but the way they rig the system is to create a gap in which you
are actually in overdraft when technically you have already made that
deposit.
Meanwhile, these fees generated enormous amounts of revenue for banks
while most customers don't even know they have opted into this system.
Opponents of the rule argue that it could restrict access to
emergency credit. We all are supporters of this idea of emergency
credit. They think that this is an example, they say, of government
overreach and that it is going to hurt banks' revenue model. Let's be
honest. This isn't about protecting consumers; it is about protecting
this massive, new profit line for big banks.
For years, I have fought against what is a predatory practice. I have
introduced legislation to crack down on exploitative overdraft fees
that banks charge consumers when they make a purchase or pay a bill
that they don't have sufficient funds for in their account, trying to
stop the games that banks play to make it more difficult for people to
avoid the overdraft fees in the first place.
The Consumer Financial Protection Bureau has been instrumental in
cracking down on banks charging surprise overdraft fees, and many banks
have said ``You are right. This is a bad practice. We should stop'' but
not all of them. So last year, the CFPB finalized this rule to curb
illegal and predatory practices. The rule lowered most big-bank
overdraft fees from $35 to $5, saving consumers in America--American
hard-working citizens--saving them $5 billion a year. On average, it
delivered $225 a year in savings for the average household. Think about
this. It is about protecting households. There is still a consequence
if you overdraft, but it can't be these usury rates.
The overdraft rule did not ban overdraft fees outright or go after
small community banks and credit unions, which were exempted from the
rule. It simply requires banks to either reduce their rates or comply
with Federal banking laws when charging high credit fees.
Several financial institutions that I have mentioned, like Capital
One and Citibank, have already eliminated overdraft fees and continue
to provide overdraft protection. They are showing, to their credit,
that it can be done and not somehow mess up their business model. You
don't need to take advantage of consumers to make money. Meanwhile,
though, Wells Fargo and JPMorgan Chase each earn over $1 billion a year
in overdraft and NSF fees--nearly four times more than the next highest
bank.
Some banks are showing ``You know what, we don't want to jerk over
the customers,'' while others, to the tune of over $1 billion a year,
are still taking advantage of some of our most vulnerable and
financially fragile Americans, who are working hard every day to try to
get out of poverty traps, yet banks take advantage of them and send
them back.
Perhaps most egregiously, in 2024, Navy Fed took nearly as much as
the biggest banks from its servicemembers, veterans, and other
customers. They took $725 million despite a dramatically smaller
customer base, clearly showing that they were trying to take advantage
of our veterans, our servicemembers, and others. Who will stand up for
them? Who will say ``You are not going to do predatory practices on our
servicemembers, on our veterans''--dramatically more than other banks
that eliminated these practices.
For those who are most affected by overdraft fees--those folks living
paycheck to paycheck, who are part of the 64 percent of Americans who
live paycheck to paycheck and are often minutes to hours away from
having the money necessary to cover expenses that lead to overdraft
fees--this rule is a lifeline to them and their families.
I was proud that New Jerseyans wrote in to the CFPB sharing how these
predatory practices were impacting them. Allow me to read from a New
Jerseyan from East Orange, my neighbor. They wrote:
[M]y account was closed with no notice due to a merchant
charging my account into the overdrafts. I've complained . .
. for weeks about said situation. Nothing was ever done. A
[$4,300] deposit was released--
By the bank--
but due to account closing, I currently have no access to
funds which were released.
[[Page S1851]]
One anonymous servicemember from Carteret, NJ, wrote:
I am writing to file a complaint against Navy Federal
Credit Union regarding multiple overdraft fees I have
incurred. Despite having sufficient funds when transactions
were authorized, I was charged due to lagged posting of
charges and credits. This issue aligns with the recent CFPB
findings . . . for similar practices where transactions
settled with insufficient balances despite initially
available funds. I believe these practices are unfair and I
request an investigation into my account transactions.
This is a New Jerseyan who is playing by the rules who is frustrated
because of practices that are clearly predatory and that take advantage
of folks who are living paycheck to paycheck, and they are a
servicemember.
Another servicemember from Manchester Township was erroneously
charged and then overdrawn from his business account from Wells Fargo.
The extra $210 that was withdrawn from my account,
including the original withdrawals and the overdraft fees,
caused a cascade effect that has led to $1,100 in overdraft
fees [this] year. I had called Wells Fargo twice to ask for
help in stopping these increasing overdraft fees. They
reimbursed me for 2 overdraft fees--$70. I was told that they
were only allowed to reverse 2 overdraft fees a year. They
also told me there was nothing else they could do to help me.
The overdraft fees of $1,100 over the last 2 months have
caused me a tremendous financial burden. As of today's date,
I am still being charged overdraft fees. I don't know what to
do, and Wells Fargo has refused to help me. I will probably
close my account with Wells Fargo, however, it is a nightmare
trying to change all the insurance companies that I receive
payments from.
Here is a servicemember, a small business person, getting screwed
over because they don't have the protection this rule would provide.
To rescind this rule in order to further enrich a small handful of
abusive banks and their shareholders that allow this to happen at the
expense of working families, at the expense of veterans, at the expense
of servicemembers, is despicable.
This body shouldn't be on the side of big banks and their further
enrichment; they should be on the side of veterans and servicemembers
and Americans struggling, working paycheck to paycheck, especially when
certain banks have shown they don't need these usury fees to make
enormous profits. Where is the moral value in that?
Instead of lowering prices and protecting consumers, I now see
Members of this body who I know the values they speak to. Some of my
colleagues on the Senate Republican side want to raise these prices on
Americans and allow these banks to prey upon servicemembers, veterans,
and working Americans. This is all while the President and Elon Musk
have continued their onslaught and attack on the Consumer Financial
Protection Bureau, which has returned billions of dollars to American
consumers.
The Consumer Financial Protection Bureau was created in the aftermath
of the 2008 crisis to protect Americans from predatory practices and
fight discriminations in the financial sector.
I wasn't here in Washington, but when the banks needed a bailout, we
were here for the banks. I don't know if we charged them overdraft
fees, but are we going to stand up for consumers now?
The CFPB has returned to the American consumers $19.7 billion in
compensation, canceled debt, and other relief--$19.7 billion. I know
firsthand the difference that the work of this Agency has made for
American families. I saw it in my time as a young lawyer taking on
slumlords in Newark. Hard-working people who could barely afford rent,
who worked 50, 60 hours a week, barely affording rent, fighting to put
food on the table for their kids, and one improper practice at a bank
can throw them into financial crisis--predatory practices, scams,
exploitation, which some banks have stopped doing.
I don't understand that this is even an issue here. This rule is to
help consumers. This rule is to help veterans. This rule is to help
servicemembers. This rule is to help the Americans who are struggling
because the top 50 percent of our country has done extraordinarily well
in the last economies under Republican and Democratic Presidents, but
the data is clear that the bottom 50 percent of our country is working
harder and making less. And we want to advantage the big banks that
have record corporate profits.
I won't back down from this fight to save the CFPB, to save those who
fight to defend consumers from being screwed over by big institutions.
Look, I know what it is like in my family story to fight. I know what
it is like to be up against insurmountable odds from my family stories.
I know what it is like to be searching for someone who will stand up
for you when you are doing everything right in this country, when you
are working hard, when you are playing by the rules, when you are
serving in your community, when you are coaching Little League, when
you are trying to help on your block. I know what it is like, when you
are volunteering at your church, to turn around and have some big,
impersonal, distant bank screw you for their profits.
It is time for this body to do the right thing. This is not
political. This is not partisan. This is, who do you stand for? At a
time when people are cynical about all of Congress--they don't feel
like anybody is fighting for them--who is going to stand up today and
say: I fight for the little guy. I fight for the small business. I
fight for the working servicemember.
Who is going to stand up? Who is going to stand up?
I know where I stand, and I encourage my colleagues to preserve this
rule that stops predatory big banks from savaging the financial lives
of too many Americans.
I yield the floor.
The PRESIDING OFFICER. The Senator from Connecticut.
Mr. BLUMENTHAL. Mr. President, I am honored to follow my friend and
colleague from New Jersey, whom I salute for his passion and his
eloquence. And thank you to Senator Warren for her leadership in
bringing us together today and to my colleagues who are rising today in
opposition to S.J. Res. 18, which seeks to undo the Consumer Financial
Protection Bureau's overdraft fee rule.
Now let's be very clear: This overdraft rule never should have been
necessary. If big banks were doing the right thing and playing fair
with their customers, this rule would never have been necessary. Taking
that fee from $35 to $5 simply reflects what the possible cost is of
overdrafts rather than banks, in effect, making money on overdrafts,
which are commonly the result of people not having enough money in
their bank account. And that is commonly the result of people being
poorer than they want to be.
I suspect that most of this administration hasn't had an overdraft
fee recently. I am guessing--I think it is an educated guess--that Elon
Musk has not had an overdraft fee recently.
Overdrafts hit people who are living paycheck to paycheck, people who
are at the bottom rung of our economic order through no fault of their
own--often the result of discrimination and denial of rights that
others are fortunate to have.
But put aside the inequities of this rule or the overdraft practices
that it tries to ameliorate, the Consumer Protection Financial Bureau
is, in effect, the watchdog or the top cop in the beat of preventing
consumers from being scammed as they are by overdraft fees.
It is under attack by the Trump administration. It has returned $21
billion to consumers. And most relevant to our conversation here today,
lowering overdraft fees from $35 to $5 would save households $5 billion
annually. That is $5 billion that goes into our economy rather than
into the coffers of banks that have over $10 billion in assets and who
trick people into paying those excessive overdraft fees; and they earn
profit from the most vulnerable families in this country.
I want to focus on one group in particular who are particularly
vulnerable--and I say it as a member of the Armed Services Committee
and the ranking member of the Veterans Affairs Committee.
Servicemembers and their families in particular have a higher stake in
this rule prohibiting exploitive overdraft fees.
And the reason is--despicably, disgustingly--servicemembers are often
targeted by bad actors and financial institutions for abusive and
predatory practices like overdraft fees or that result in overdraft
fees.
A Department of Defense survey revealed that 10 percent of Active-
Duty and Reserve servicemembers paid overdraft fees two or more times
in the
[[Page S1852]]
past year, which is more than the average American. Let me just repeat:
Two or more times in 1 year, they paid overdraft fees. My guess is that
most Members of this Chamber haven't paid overdraft fees in years and
years, maybe not since you were in college or law school, graduate
school.
Two or more times, our servicemen and -women have been exploited by
these banks in charging fees for overdraft.
For years, servicemembers across the country have filed complaints
with the CFPB over these unfair and deceptive practices, like
skyrocketing fees.
Just one example: A servicemember in Connecticut filed a claim with
the CFPB in 2018 about Wells Fargo's predatory overdraft practices. He
reported he had an overdraft protection turned off his account, but
Wells Fargo still allowed autopayments to be taken out and then charged
$35 rather than denying the payments for lack of funds.
These overdrafts should have been denied, but instead, they went
through and cost this servicemember over $60 in unwanted fees.
Now, I know to a lot of Members of this body, 60 bucks is no big
deal. Anybody familiar with the young enlisted men in our U.S. military
today who live, literally, paycheck to paycheck knows that $60 may be
the difference between having the means to get home on leave. It may be
the difference between enjoying a weekend on leave.
So the $60 in unwarranted fees that that servicemember paid was a big
deal to him. But today, the Republicans unfortunately are shamefully
doing the Trump administration's bidding. They are stripping crucial
protection away from working American families and our military
members, and it is simply and plainly a gift. It is a gift to Big Bank.
We can speculate on what the motives are. They are big banks. They
contribute a lot of money to campaigns. But every attack on the CFPB,
including this CRA, is an attack on consumer protection, commonsense
safeguards that make sure that Americans can avoid being exploited by
big and powerful institutions.
Overturning the overdraft rule is yet another giveaway to these big
banks and the billionaires who control and run and own them.
I have said before but it bears repeating: President Trump will
always help his billionaire friends at the cost of helping you.
Today, I urge my colleagues to vote against this attack on the CFPB.
Vote no on S.J. Res. 18.
I yield the floor to my great friend and colleague from Massachusetts
Senator Warren.
The PRESIDING OFFICER (Mr. Schmitt). The Senator from Massachusetts.
Ms. WARREN. Mr. President, I want to thank the Senator from
Connecticut for his work today in defending the Consumer Financial
Protection Bureau and highlighting again the importance of this work
from CFPB to help level the playing field just a little between the
billionaire banks and our hard-working servicemembers and families that
are living paycheck to paycheck.
I also want to thank Senator Booker for coming here and talking today
about how people from New Jersey have been directly affected by
overdraft fee abuses and appreciate his work on this.
President Trump and Republicans promised the Americans that they
would lower their cost of living. Instead, they are now linking arms
with some of the biggest banks in the country to impose billions of
dollars in fees on working families.
Today, Republicans are voting to overturn a CFPB rule that prevents
big banks like Bank of America, JPMorgan Chase, and Wells Fargo from
saddling customers with hundreds of dollars in overdraft fees when a
customer overdraws a checking account by only a few dollars.
Let's be clear: This rule covers only the biggest banks, those with
more than $10 billion in assets. Community banks are completely exempt
from this.
All this rule does is ensure that overdraft fees are reasonable.
Under the rule, banks are allowed to recoup all of their costs and all
of their losses associated with providing overdraft. That is,
typically, under $5, which is why the CFPB's rule generally caps
overdraft fees at $5. But if the bank can show its costs are higher,
then they charge the full amount of their actual costs and losses.
What the banks cannot do is play a game of gotcha in which the bank
manipulates the customer's account to hit the customers with hundreds
of dollars in overdraft charges.
Today, a handful of giant banks are charging about $35 per bounced
payment, squeezing families for far more than what it typically costs
to offer this overdraft. And consumers carrying the vast majority of
these fees are disproportionately low-income Americans, with the
typical customer who gets caught with overdraft fees ending up paying
more than $400 a year.
Now, $400 can be the cost of a mortgage payment or rent for someone
with a modest income; $400 can be the difference between their kid's
medication or just going without; $400 for some families can be several
weeks' worth of groceries. This money matters to millions of families.
Altogether, the CFPB rule saves American families up to $5 billion a
year. Republicans claim they care about lowering costs, but overturning
this rule will make big banks richer and hard-working families poorer.
The Republicans are deeply sympathetic--deeply sympathetic--to giant
banks. They worry about poor little Wells Fargo. They shed a tear for
JPMorgan's extra billion dollars in profits that they make from
overdraft fees on top of $27 billion they make in their other banking
services.
Yes, the Republicans worry about those giant banks and that $5
billion that they would have to forgo if they could only charge $5 on
an overdraft fee.
Look, banks can survive with limits on overdraft fees. How do we know
that? Because they are already doing it. In fact, many banks, including
Capital One and Citibank, have eliminated overdraft fees entirely, and
they are still making billions of dollars in profits.
No, these fees are about kicking hard-working Americans when they are
down.
My constituent April from Massachusetts shared this:
During the years of my life when money was always tight,
nothing was more stressful than overdrafting my account by $1
only to lose $35 due to overdraft. More than once, that
additional $35 loss tangled up my budget for multiple
paychecks or made the difference between getting groceries or
not.
Joan, also from Massachusetts, talked about how insidious these fees
can be.
Several times when money was tight, I refilled my account a
bit too late. I was charged an overdraft fee that then itself
caused the next check to bounce, causing another fee. On top
of that, there were daily fees because overdraft charges kept
me behind even as I added money to the account.
To make matters even worse: These abusive, anti-consumer practices
often target servicemembers and military families.
Last year, the CFPB ordered Navy Federal Credit Union to refund $80
million in illegal surprise overdraft fees, which they had charged
servicemembers, even when the servicemembers' accounts showed enough
money to cover the transactions.
Cracking down on abusive overdraft practices, particularly when they
harm servicemembers, has bipartisan support. A year ago, my then-
colleague JD Vance and I launched an investigation into another credit
union that had preyed on servicemembers with extortionate overdraft
fees. I hope to see the same bipartisan concern now and support for the
CFPB rule that puts a stop to this squeeze on military families.
Look, finally, I just want to mention: I know that my colleagues on
the other side of the aisle and on this side of the aisle are concerned
about debanking. Now debanking is something that happens when a bank
closes someone's account without any real explanation.
Overdraft practices have been the reason for tens of millions of
account closures, shutting out far too many Americans from our banking
system. So for everyone who has concerns about debanking, consider that
the CFPB rule eliminates one of the main excuses that banks have used
for debanking their customers.
Look, our job is to lower costs for American families, not boost
profits for giant banks. A vote against today's CRA is a vote to
protect those families
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and save them $5 billion a year. I urge my colleagues to vote no.
I yield the floor.
The PRESIDING OFFICER. The Senator from Texas.