[Congressional Record Volume 171, Number 64 (Wednesday, April 9, 2025)]
[House]
[Pages H1519-H1525]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
DISAPPROVING THE RULE SUBMITTED BY THE BUREAU OF CONSUMER FINANCIAL
PROTECTION RELATING TO ``OVERDRAFT LENDING: VERY LARGE FINANCIAL
INSTITUTIONS''
Mr. HILL of Arkansas. Mr. Speaker, pursuant to House Resolution 294,
I call up the joint resolution (S.J. Res. 18) disapproving the rule
submitted by the Bureau of Consumer Financial Protection relating to
``Overdraft Lending: Very Large Financial Institutions,'' and ask for
its immediate consideration in the House.
The Clerk read the title of the joint resolution.
The SPEAKER pro tempore. Pursuant to House Resolution 294, the joint
resolution is considered read.
The text of the joint resolution is as follows:
S.J. Res. 18
Resolved by the Senate and House of Representatives of the
United States of America in Congress assembled, That Congress
disapproves the final rule submitted by the Bureau of
Consumer Financial Protection relating to ``Overdraft
Lending: Very Large Financial Institutions'' (89 Fed. Reg.
106768 (December 30, 2024)), and such rule shall have no
force or effect.
The SPEAKER pro tempore. The joint resolution shall be debatable for
1 hour, equally divided and controlled by the chair and ranking
minority member of the Committee on Financial Services or their
respective designees.
The gentleman from Arkansas (Mr. Hill) and the gentlewoman from
California (Ms. Waters) each will control 30 minutes.
The Chair now recognizes the gentleman from Arkansas (Mr. Hill).
General Leave
Mr. HILL of Arkansas. Mr. Speaker, I ask unanimous consent that all
Members may have 5 legislative days to revise and extend their remarks
and include extraneous material on the resolution under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Arkansas?
There was no objection.
Mr. HILL of Arkansas. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I rise in support of this joint resolution of
disapproval.
Today, we can protect consumers and ensure continued access to
financial services by voting to nullify the Consumer Financial
Protection Bureau's disastrous rule on overdraft fees.
In a time burdened by the 40-year-high inflation, when many middle-
and low-income households are living paycheck to paycheck, ensuring
Americans have access to affordable credit has never been more
important.
Overdraft protection is an optional service that financial
institutions provide to help consumers avoid having purchases declined.
Instead of the transaction being denied, the bank or credit union
charges a flat fee to cover the check on behalf of that consumer. It
lets that purchase proceed. It lets that payment to a utility company
proceed. It lets that payment for an important rent or mortgage company
to proceed, thereby allowing American families to take care of
essential needs like that mortgage payment, rent payment, groceries, or
gas before their next paycheck arrives.
Over the last decade, competition has driven financial institutions
to lower their overdraft privilege fees to retain customers. Innovation
has made accidental overdrafts less likely as many financial
institutions now offer low balance alerts, automatic transfers from
savings, and other tools to help consumers avoid being in overdraft and
better manage their financial cash flow.
Competition and innovation, not government-mandated price caps,
remain the best way to ensure consumers have access to affordable
financial products and services.
Unfortunately, this CFPB rule undermines this very approach and
threatens to restrict access to credit and overdraft privileges, which
all of us should be concerned about.
The CFPB's rushed and haphazard approach to the rule is a clear
example of how not to regulate. The CFPB made this decision before
conducting meaningful research or considering the real-world
consequences of its actions.
The CFPB's rule imposes a government-mandated price cap on what
financial institutions may charge in the way of a fee for an overdraft
privilege.
Like all price caps, this would reduce the availability of these very
overdraft services, especially, Mr. Speaker, for consumers who have
lower credit scores or are considered high risk.
By doing so, it effectively limits access to credit and that
overdraft privilege for those who need it the most at the time they
need it the most.
The CFPB's failure to consider the cost associated with this
regulation, especially the real-world impact on consumers, their local
community's financial institution, and the broader financial system
only underscores the need to stop this price control before it is too
late.
The CFPB also creates a false narrative of choice by suggesting that
banks and credit unions can either offer an overdraft service at this
federally mandated price fixed cost of $5 or comply with extending that
as credit and, therefore, complying with the Truth in Lending Act. In
other words, actually underwriting a consumer loan instead of simply
offering the overdraft--simple, straightforward, fast, overdraft fee.
This redefinition of what products and services constitute credit
thus is problematic, especially since Congress has already defined
credit for regulatory purposes.
Even more troubling is the way the CFPB oversimplifies the costs of
providing overdraft protection.
The rule only considers the cost of operating a call center and
ignores the many other expenses involved such as ratifying and dealing
with consumer disputes, mailing and postage for overdraft notices,
third-party collection expenses, technology costs, and cost of
regulatory compliance.
The reality is that these additional costs make it increasingly
difficult for banks to continue offering overdraft protection. Many
will simply choose to stop providing the service altogether. Those who
will suffer the most from this are the very people the rule is designed
to protect.
Mr. Speaker, in 2023, a survey found that 92 percent of customers who
were aware their balance wouldn't cover a transaction preferred paying
the overdraft fee rather than having their transaction declined. Not
only is it inconvenient or potentially embarrassing in a particular
situation, but it is also fundamental to in-between paycheck cash flow.
They are making the decision to go into overdraft so they make that
mortgage payment on time, despite buying clothes for back to school and
trying to do Christmas shopping.
{time} 1315
In my experience with my customers, over my many years of working
with families, I never found one who was not a worthy steward of how to
use these services.
Another survey found that 64 percent of customers think it is
reasonable for a bank to charge an overdraft fee, and 72 percent feel
these fees are justified, particularly when it helps them ensure timely
payment of a much larger important bill, like a mortgage or rent.
In my experience of helping families across rural Arkansas for many
years, as I said, managing their finances, they are pretty smart about
how to do that, Mr. Speaker.
The truth is if the consumers lose access to overdraft protection,
they will be forced to turn to alternative sources of credit that may
be more expensive and riskier, have less consumer protection and
documentation, and be less holistically handled than they would be at
their home community financial institution or credit union.
I encourage all of my colleagues to support this resolution to
restore common sense to our regulatory framework and ensure that
consumers continue to have access to the financial services on which
they rely.
Mr. Speaker, I reserve the balance of my time.
Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in complete opposition to yet another harmful
bill put forth by Republicans, S.J. Res. 18, a resolution to allow the
biggest banks to increase fees on their customers. You heard me right.
I said this resolution will increase bank fees, and it will
[[Page H1520]]
impact 23 million households, or roughly 1 in 5 households, that incur
overdraft fees each year.
Despite Trump and Republican campaign promises to lower prices, the
President decided to launch a global trade war just last week that
wiped out a 2-day record of $6.6 trillion of wealth, affecting the
retirement savings of millions of Americans. Moreover, the Fed Chair
has said these policies will fuel higher inflation by sending the
prices of consumer goods up.
It doesn't seem like the President cares about prices anymore,
saying: ``I couldn't care less. I hope they raise their prices because,
if they do, people are going to buy American-made cars. We have
plenty.'' Trump doesn't care that prices for cars and other goods will
rise significantly.
We are here today because Republicans now want to overturn a rule
that limits bank overdraft fees to $5, down from $35 or more, and saves
consumers $5 billion a year. Not surprisingly, more than 80 percent of
Americans, including Republicans, want to get these high overdraft fees
under control, yet Republicans will vote to take off the limits on
these fees and say that higher fees are good for America.
Let's clear up a few myths. The Consumer Financial Protection
Bureau's rule does not ban overdraft fees. Rather, it sets a reasonable
limit at $5 per overdraft charged by the biggest banks in America.
Despite what opponents may claim, the rule does not impose a hard cap
on this fee. It provides flexibility for large banks to charge more if
their estimated costs and losses in providing this service are higher
than $5. The rule even allows big banks to charge higher fees if they
provide a simple, upfront disclosure to consumers.
Think about that. Why is it if you want to charge more money than the
$5, you don't want to tell your customers that you are raising and
charging more? I don't get it.
That is right, the biggest banks can feel free to charge higher fees,
but they just have to tell consumers that they plan to do so.
Furthermore, this rule does not apply to any small community banks or
credit unions. In fact, 97 percent of all banks and virtually all
credit unions are completely exempt from the rule. Let me say that
again. Community banks and nearly all credit unions are exempt from the
rule. We are only debating whether the biggest banks in America should
be able to raise these fees.
Republicans will try reverse psychology to convince Americans that it
is in their best interests to fork over even more money to the big
banks.
Mr. Speaker, let me help Republicans out. Making Americans pay high
overdraft fees only benefits the big banks, no one else.
Let me be even clearer. A vote for this resolution is a vote for big
banks. A vote for this resolution is a vote for big fees. A vote for
this resolution is a vote against your constituents.
Don't just take my word for it. Nearly 300 consumer, civil rights,
labor, religious, and community groups all across the country strongly
oppose this resolution.
Mr. Speaker, these fee increases that Republicans are trying to jam
down Americans' throats couldn't come at a worse time. The Federal
Reserve reported that a key metric of inflation is going up, and that
was before President Trump sent the stock market further into the tank
with the global trade war he launched last week.
Republicans promised that inflation would go down and the stock
market would thrive under his leadership, but 4 months into the new
administration, that has proven to be false.
Whether you like the Consumer Financial Protection Bureau or not, it
just doesn't make good sense to hike bank fees on 23 million
hardworking families.
Democrats on the Financial Services Committee voted unanimously to
oppose this resolution at a markup in February, and I urge all of my
colleagues to unanimously reject it on the floor today.
Mr. Speaker, I reserve the balance of my time.
Mr. HILL of Arkansas. Mr. Speaker, let me say that the gentlewoman
from California knows my respect for her and her leadership on our
committee, but there is no effort here to raise overdraft fees in this
resolution. It is quite the contrast. All we are saying is we don't
need the Federal Government having a price cap on a product that is a
very competitive product, with many, many banks not even charging for
overdraft protection.
There is nothing hidden, Mr. Speaker, about fees on overdrafts. The
Electronic Fund Transfer Act signed by this Congress made it clear
decades ago that consumers must opt in to overdraft protection. Let me
repeat that. Consumers select to do this. They shop for financial
institutions online, down the street, whatever. They pick their credit
union or bank to do business with. If they want overdraft protection to
make sure that they are actually being protected on an extra payment or
some bill they have between paychecks, they have it. It is completely
spelled out.
Regulation DD in the Truth in Savings Act requires financial
institutions to provide that information. Clearly, customers opt in to
it.
Mr. Speaker, I promise you, I had it all through my early career when
I couldn't make payments between paychecks. A young family, one income,
lots of children, a lot of expenses, you do it. It is a good, prudent
practice.
As a community banker for decades, I can promise you families were
smart about it. There is nothing hidden about it. It is fully present.
Consumers opt in to it, and the competition is intense to retain those
customers.
Mr. Speaker, I yield 2 minutes to the gentleman from Tennessee (Mr.
Rose), my good friend. Mr. Rose was the Commissioner of Agriculture in
Tennessee before coming to Congress. He is a very active member of both
the House Financial Services Committee and the Agriculture Committee.
He has rural Tennesseans and their financial success at heart.
Mr. ROSE. Mr. Speaker, I thank Chairman Hill for yielding me time to
discuss this important issue.
Mr. Speaker, it is no secret that the sky was the limit when it came
to regulations for the last administration. Our Nation endured 4 years
of costly new rules, rules that continue to wreak havoc on our economy
and stunt economic growth. Indeed, it is going to take some time to
undo the mess from the last White House.
S.J. Res. 18 puts us one step closer to cleaning up this mess. It
calls the Consumer Financial Protection Bureau's overdraft rule what it
is: drastic, punitive, and harmful to banks and credit unions. It also
stands to harm the very people it purports to protect.
Mr. Speaker, I share with you today a story of a lady in one of the
towns in my district, Lafayette, who said to me fairly recently:
``Please don't take away my overdraft protection.''
If the Consumer Financial Protection Bureau requires banks to charge
no more than $5 for a $200 overdraft, we will likely see an end to that
service altogether. No one wants to overdraft. Unfortunately, it isn't
uncommon. In fact, many Americans can recall using overdraft services
and them being a lifeline at one point or another in their lives. This
is just one of many examples of overreach by the last administration,
and it must be overturned.
In America, we celebrate capitalism. We encourage competition. We
don't smother our financial institutions just for political favor.
Mr. Speaker, I urge my colleagues to vote for this resolution in
defense of financial institutions that choose to extend overdraft
lifelines to their customers who need them.
Mr. HILL of Arkansas. Mr. Speaker, I reserve the balance of my time.
Ms. WATERS. Mr. Speaker and Members, I think Mr. Hill said many banks
do not charge overdraft fees. Then why are they opposed to $5?
Mr. Speaker, I yield 1 minute to the gentlewoman from Massachusetts
(Ms. Pressley).
Ms. PRESSLEY. Mr. Speaker, I thank Ranking Member Waters for her
leadership, under which we have advocated to create an economy that
works for all people, not just Elon Musk and wealthy billionaires.
That is why I oppose this measure to overturn the Consumer Financial
Protection--emphasis on ``Protection''--Bureau rule that caps overdraft
fees by banks at $5.
The work of CFPB has been cost-saving and life-changing, but this
resolution would undo that progress. Whether it is an elder whose
Social Security
[[Page H1521]]
check was delayed into her direct deposit, likely because of Trump's
mass firings, or the young college student who makes the innocent
mistake of confusing a savings and checking account, anyone can be
affected by unnecessary junk fees.
Let's be honest, it is our most vulnerable who will bear the brunt of
the harm. For the single parent who has to pay bills today with money
that is coming tomorrow, overdrafting may be their only option. The
exorbitant fees, sometimes $35 for every overdraft, would further push
them into debt.
It is a shame the Republicans are attacking poor people just to help
greedy bank CEOs get richer, the shame and the sham of it all.
I oppose this resolution and encourage everyone to stand with working
people who are struggling to make every single dollar stretch.
The SPEAKER pro tempore. The time of the gentlewoman has expired.
Ms. WATERS. Mr. Speaker, I yield an additional 1 minute to the
gentlewoman from Massachusetts.
Ms. PRESSLEY. Mr. Speaker, they are struggling to make every dollar
stretch because of the harmful policies advanced by your dictator in
chief. Vote ``no.''
The SPEAKER pro tempore. Members are reminded to refrain from
engaging in personalities toward the President.
Mr. HILL of Arkansas. Mr. Speaker, I yield 1 minute to the gentleman
from Wisconsin (Mr. Fitzgerald), a greater leader there, a fine leader
in this House on the Judiciary Committee, and an active member on the
House Financial Services Committee.
Mr. FITZGERALD. Mr. Speaker, I rise today in support of Chairman
Hill's resolution to overturn the CFPB's misguided overdraft rule.
In Wisconsin, community banks and credit unions are the backbone of
our local economies. They know their customers. They serve their
neighbors. They provide trusted financial tools like overdraft
protection to help families manage their emergencies.
Overdraft protection is a critical tool that helps families avoid
declined transactions, bounced checks, and costly disruptions. It does
so transparently with clear disclosure.
A 2023 study from the Financial Health Network found consumers want
overdraft services and the flexibilities that they provide.
The CFPB rule amounts to government price controls that will limit
access to a lawful, contractually agreed-upon product. The rule will
not help working families. It will hurt them.
By capping fees below the costs of providing the service, many banks
and credit unions will be forced to reduce or eliminate overdraft
programs altogether.
Because of the CFPB's rule on overdrafts, consumers will lose
options. The resolution will repeal the CFPB's rule and protect
consumers.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. HILL of Arkansas. Mr. Speaker, I yield an additional 30 seconds
to the gentleman from Wisconsin.
{time} 1330
Mr. FITZGERALD. Mr. Speaker, many people will face declined payments,
higher minimum balance requirements or, worse, be pushed toward riskier
unregulated products.
This resolution will repeal the CFPB's rule and protect consumers'
access to financial products.
I urge my colleagues to support this CRA resolution, defend consumer
choice, and restore regulatory certainty to our financial system.
Ms. WATERS. Mr. Speaker, Mr. Rose, I believe, said that there are
constituents who say: Don't stop my overdraft. However, did they say:
Charge me exorbitant amounts for overdraft? I don't think so.
Mr. Speaker, I yield 2 minutes to the gentlewoman from Michigan (Ms.
Tlaib).
Ms. TLAIB. Mr. Speaker, I think it is incredibly shameful that my
Republican colleagues want to gut the rule that capped most credit card
late fees at just $5.
Credit card companies over the people we represent, that is what they
are choosing with this.
Working families, as many of us know, are struggling with rising
costs. Mr. Speaker, 60 percent of the residents who we represent live
paycheck to paycheck.
Did you know when this all came about, it was because our country
found out through investigation that credit card companies were
building business plans where 50 percent of their profit came from late
fees. They basically built a business plan for overdraft fees. That is
what they did.
Now my colleagues right here want to overturn the rule that prevents
the biggest banks--think about this, this is not like small banks, this
is the biggest banks--from exploiting, shamefully targeting the
American people.
I know overturning this rule will cost $5 billion annually. That
averages about $225 per household that would have to pay the overdraft
fees that many of these folks put business plans together on.
Credit card late fees, Mr. Speaker, also widen the racial wealth gap.
They impact and put a heavy burden on some of the poorest communities,
working-class folks. These are frontline workers.
Gutting the overdraft rule is a slap in the face of the families,
again, who are already struggling to make ends meet. This is raising
the costs for families when we don't check corporate greed.
Again, these are credit card companies that you all are hollering
about right now. I wish you would do that for people who are sick and
can't afford their diabetes medicine or those who are struggling right
now with wage theft in their workplace. These are all things that we
could actually be fighting for right now for our families, like the
rising cost of groceries, but instead we are wasting time advocating on
behalf of credit card companies, not the people who we represent.
Mr. HILL of Arkansas. Mr. Speaker, I yield myself such time as I may
consume.
Let me say that the gentlewoman makes a good point about financial
management when it comes to late fees and accelerated interest rates on
credit cards. That is why we are actually talking about overdraft
protection today, because time and time again people take advantage of
affordable, convenient, disclosed, not hidden overdraft protection so
that their family can avoid a late fee on a credit card, which she just
gave an excellent overview of her concerns about.
If we want to do that, then give people the financial tools that they
have in overdraft protection without micromanagement from the Federal
Government. Don't take my word for it or anyone on this side of the
aisle.
The Federal Reserve Bank of New York found that artificial price
caps, like the one being discussed, being proposed by the CFPB on
overdraft protection programs, reduced the supply, leading to fewer
bank accounts for low-income families, period, full stop. I hear all
the concern.
Mr. Speaker, I yield 1 minute to the gentleman from North Carolina
(Mr. McDowell). We are glad to have his voice in this debate.
Mr. McDOWELL. Mr. Speaker, I rise in support of this resolution to
overturn a ludicrous rule which imposes government price controls on
financial institutions across the country.
The Biden administration's CFPB issued this rule right before they
left town, and they sold it as a defense of consumers. Mr. Speaker, you
can say something a million times, and it still won't make it true.
Instead of helping consumers, government price controls will simply
lead to more denied transactions and less consumer freedom.
Here is the reality, Mr. Speaker: Many local banks across the country
already offer overdraft services that provide Americans a safety net on
their financial services, and it is exactly these types of services
that foster competition, giving consumers a choice in where to bank.
This resolution would repeal the Biden administration's government
price control scheme. I urge my colleagues to vote ``yes'' on this
resolution.
Ms. WATERS. Mr. Speaker, I yield 1 minute to the gentlewoman from
Texas (Ms. Garcia).
Ms. GARCIA of Texas. Mr. Speaker, I mentioned earlier that Democrats
created a watchdog, the Consumer Financial Protection Bureau, to stop
scams and protect everyday people. One of the most important things
they have done
[[Page H1522]]
recently: They capped bank overdraft fees at $5. If your account goes a
few dollars negative and your check bounces, the bank cannot charge you
more than $5. Most banks charge between $25 and $35. Again, the cap is
$5.
Well, for some reason, the Republicans want to get rid of this. I
don't know why. Maybe it is because their bank buddies like JPMorgan
Chase made about $58 billion in profit last year, and $1 billion of
that came from junk fees, just like the overdraft fee Republicans are
now trying to allow banks to raise.
However, Republicans aren't worried about that. They don't worry
about bounced checks because Republicans live in a different world, a
world where banks win and families lose.
I urge my colleagues to vote ``no.'' Vote for people, not for banks.
Mr. HILL of Arkansas. Mr. Speaker, I yield 3 minutes to the gentleman
from Montana (Mr. Downing), a new member of the House Financial
Services Committee. We are so delighted to have his expertise on our
committee. He has a securities regulatory background. He was the State
auditor. He serves on our committee and on the House Small Business
Committee.
Mr. DOWNING. Mr. Speaker, I thank Chairman Hill for his leadership in
bringing this important legislation to the floor.
The bill we have before us today reverses perhaps the most
misunderstood rulemaking in financial services. On its face, you may
look at a proposal to cap overdraft fees and think, wow, that sounds
like a great idea. After all, who wants to pay more in fees?
However, in reality, the CFPB's rule capping overdraft fees is
nothing more than an eleventh hour effort from Biden's rogue financial
regulators to score political points at the expense of everyday
Americans.
Financial institutions have to be able to generate profit from the
products they offer. Otherwise, they will not be able to offer them at
all.
By capping overdraft fees, the CFPB has made it increasingly more
costly for banks and credit unions, especially those that service folks
in rural districts like mine, to offer overdraft protection.
When these lenders are no longer able to charge competitive rates,
they may be forced to cover the cost by increasing other critical
services or stop offering the services altogether.
What does that result in? It results in less choice and less
protection.
Imagine a single mother trying to make ends meet. She needs to feed
herself and her son, the rent is due, but she doesn't have enough in
her account to cover both. If she is not able to access overdraft
protection or other far riskier means of short-term liquidity, imagine
the outcome.
This rulemaking doesn't help people in these positions as it pretends
to. It jeopardizes their survival.
When governments act as though they know better than the consumers
and the markets, everyday people pay the price. Let's not make that
mistake today. I urge my colleagues to support this legislation.
Ms. WATERS. Mr. Speaker, I yield 1 minute to the gentleman from
Louisiana (Mr. Fields).
Mr. FIELDS. Mr. Speaker, I thank the gentlewoman from California, the
ranking member, for fighting predatory lending over the years.
Mr. Speaker, I rise today to oppose S.J. Res. 18 which would
dismantle important protections against predatory overdraft practices.
Let me be absolutely clear: Overdraft protection is a profit center
for big banks disguised as a service fee. These institutions made over
$9 billion from overdraft fees last year alone.
When a constituent in my district gets a $35 charge for a $5
purchase, that is not covering bank costs, that is a 700 percent markup
designed purely to boost profits.
The CFPB's rule only affects banks with assets over $10 billion,
institutions that would remain highly profitable without these
predatory practices. These megabanks aren't using overdraft fees to
stay afloat.
The SPEAKER pro tempore. The time of the gentleman has expired.
Ms. WATERS. Mr. Speaker, I yield an additional 1 minute to the
gentleman from Louisiana.
Mr. FIELDS. Mr. Speaker, I thank the gentlewoman for the additional
time.
They are using them to pad their already substantial bottom lines at
the expense of working families in Louisiana and across America.
Mr. HILL of Arkansas. Mr. Speaker, I yield 1 minute to the gentleman
from Florida (Mr. Haridopolos), our new Member from the Space Coast.
Mr. HARIDOPOLOS. Mr. Speaker, I rise in support of the resolution to
overturn the CFPB's overdraft rule. This is a classic midnight maneuver
from the previous administration that ignored market realities.
Let's be clear: It is competition, not heavy-handed regulation that
drives down costs. According to the CFPB's own data from 2020 to 2023,
overdraft fees fell by 50 percent without this rule. That means the
market is working, and that is why I support this resolution.
Ms. WATERS. Mr. Speaker, I yield 1 minute to the gentlewoman from
Oregon (Ms. Bynum).
Ms. BYNUM. Mr. Speaker, my constituents are struggling with high
costs and inflation, and more and more families are living paycheck to
paycheck, and still the supporters of this bill are trying to increase
their fees? I can't and I won't get behind that. It is out of touch.
Not only is that hurting our families, but it is also unfairly
penalizing our kids, who are trying to learn financial responsibility.
My son recently got a debit card. He is 14, and he uses it for small
stuff and things like buying PlayStation skins, Fortnite skins,
whatever kids buy. If he accidentally spends more than he has, $35, in
my opinion, is too high of a penalty. The average American kid would
have to work 5 hours at the Federal minimum wage to get that back. I
think that is crazy.
Every American should have the opportunity to participate in our
economy and not be on their knees when they do. I strongly oppose this
resolution, and I support the rule to cap overdraft fees at $5.
Mr. HILL of Arkansas. Mr. Speaker, I yield 3 minutes to the gentleman
from Michigan (Mr. Huizenga), the vice chairman of our full committee,
who has such distinguished service on our committee. He is a leader in
every way and also in the House Foreign Affairs Committee.
Mr. HUIZENGA. Mr. Speaker, the Bureau's overdraft rule would
implement government price controls over a product that has proven
necessary for consumers to make day-to-day purchases.
Today, Congress has an opportunity to invalidate this Biden-era rule
that, if implemented, would severely impact community banks and local
credit unions by restricting the services they can offer, while at the
same time depriving millions of Americans of an important financial
safety net.
According to a 2024 survey, consumers stated that they use overdraft
services because they lack credit alternatives. Taking away this
backstop, which Americans say they use when in a pinch for food,
utilities, and transportation, only further limits the financial
options that they have available to them.
According to a New York Fed study--not exactly a conservative
institution, I will tell you that--entitled, ``Who Pays the Price?
Overdraft Fee Ceilings and the Unbanked,'' the New York Fed says:
``Overdraft fee caps hinder financial inclusion. When constrained by
fee caps, banks reduce overdraft coverage and deposit supply, causing
more returned checks and a decline in account ownership among low-
income households.''
{time} 1345
Mr. Speaker, I happen to know that because I have represented some of
the poorest counties in the State of Michigan in my time in Congress.
This is a valuable tool those on the lower end of the economic rung
use.
After the November election and President Trump won, regulators got
the message, for the most part, to stop their rulemaking and put their
pens down. However, Director Rohit Chopra couldn't help himself.
This is a clear example of government knows best, and we know what
this is really about. Fewer community banks and credit unions will lead
to more consolidation and less options. I believe most Members here
share a common goal to ensure financial inclusion, as well as financial
literacy and
[[Page H1523]]
awareness. Frankly, this rule isn't going to accomplish that. My
friends on the other side of the aisle know it.
After the bank failures of 2023, community financial institutions
lost consumers and remain at a disadvantage. Again, any rule that leads
to greater consolidation in the banking industry only benefits the
largest financial institutions in America, a class of banks regularly
attacked by Members on the other side, and yet now they are trying to
help them.
Although overdraft is one of the most transparent and competitive
products available in depository banking, they make up about 2 percent
of consumer complaints.
How have the banks responded? They have responded by proactively
taking steps to promote further transparency in their overdraft
products without government intervention. This includes low-balance
alerts, grace periods, and other innovative tools that make sure
consumers are protected from unnecessary fees.
Financial institutions in my home State of Michigan, who represent
roughly 12 million customers and hundreds of billions of dollars in
deposits, have shared stories of consumers who use this overdraft
strategy to ensure important expenses are paid. Rent, utilities, and
medical bills are ultimately paid when a shortfall exists.
Mr. Speaker, with that, I request a ``yea'' vote from my colleagues.
Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, the Republicans keep complaining about the Consumer
Financial Protection Bureau. Let's review the terrible things they have
done.
Since 2011, they secured more than $21 billion for 205 million
consumers who were harmed by bad actors including the biggest banks.
The agency has received more than 10 million complaints from harmed
consumers, and insured financial firms responded. That is, on average,
25,000 complaints each week.
The Consumer Financial Protection Bureau helps servicemembers,
veterans, students, and older Americans. Mr. Speaker, they don't care
who you are. They help Republicans, Independents, and Democratic
consumers. The CFPB will not be able to help anyone if Trump and Musk
are successful in shutting them down.
Mr. Speaker, I yield 2 minutes to the gentleman from California (Mr.
Liccardo).
Mr. LICCARDO. Mr. Speaker, I thank the ranking member for yielding
time.
Mr. Speaker, I am here to commemorate liberation month. A week ago,
Liberation Day brought us President Trump's tariffs which will liberate
a typical American family from 3,800 of their hard-earned dollars each
year, according to one study.
The Trump slump, moreover, has liberated our retirement accounts from
more than 6 trillion of those hard-earned dollars through market
losses.
In week 2 of liberation month, the Republican majority proposes S.J.
Res. 18 which will increase the annual cost of bank overdraft fees on
American families by an average of $225, collectively liberating all of
us of 5 billion more of our dollars in a given year.
Remember, the average debit card overdraft is less than $26. Mr.
Speaker, it is repaid typically within 3 days on average. A typical
overdraft fee of $35, which is what we had before the rule, amounts to
an interest rate of more than 16,000 percent APR on the bank's loan of
$26. Mr. Speaker, that is usurious. American families cannot afford any
more liberation.
It is not as though we have a history here in which banks have always
complied with the notion that these overdraft fees are simply to offer
a service. We know that it has been used to pump up profits, in fact,
illegally on several occasions.
Mr. Speaker, in 2017, TCF National Bank was cited by CFPB and
ultimately settled. It paid $30 million for its abuse of overdraft
fees.
In 2020, TD Bank was sanctioned $123 million for, among other
violations, deceptive practices related to debit card overdraft.
Mr. HILL of Arkansas. Mr. Speaker, I yield 4 minutes to the gentleman
from Kentucky (Mr. Barr), the chairman of our Subcommittee on Financial
Institutions.
Mr. Speaker, he has his two top advisers with him, Eleanor and Mary
Clay.
Mr. BARR. Mr. Speaker, I thank my friend, Chairman Hill, for bringing
this important resolution of disapproval to the House floor, nullifying
the Consumer Financial Protection Bureau's disastrous overdraft rule.
Let me set the record straight, Mr. Speaker. This resolution of
disapproval doesn't increase fees, as my friends on the other side of
the aisle insinuate. In fact, what it does do is it invalidates a
regulation that will take this critical lifeline away from many of my
constituents.
Indeed, for many families across this country, living paycheck to
paycheck, overdraft services are a critical safety net. Without this
service, necessities would become harder to obtain. Overdraft services
are not a luxury. They are a lifeline. For my friends on the other side
of the aisle to use incendiary language like ``shameful,'' I submit
what is shameful is to take away this lifeline from our constituents.
Consumers understand the costs associated with overdraft services,
and they willingly opt in because they find value in the protection
that it offers. They are not coerced. They make an informed decision,
knowing that a small, predictable fee prevents far more severe
consequences like a bounced check or late fees.
It is a convenience that allows consumers to avoid the embarrassment
of being turned down at the point of sale. Unfortunately, my Democrat
colleagues refuse to recognize this basic truth, choosing instead to
label overdraft products as predatory.
Let me reiterate that point, Mr. Speaker. Consumers choose to use
this service, and they opt into the service voluntarily.
The first option under the new rule forces financial institutions to
treat overdrafts as extensions of credit. This change would severely
limit access to the product, especially for those who need it most.
Financial institutions would have to underwrite each overdraft
transaction, evaluating a borrower's ability to pay a relatively small
amount. This would be both impractical and inefficient.
The alternative proposed by the Bureau, a safe harbor charge cap of
$5, would force many banks to exit this product altogether. Credit
unions would also discontinue this service. This would price out the
very consumers who rely on overdrafts the most.
They use the word ``predatory.'' Mr. Speaker, let me tell you what is
predatory. What is predatory is taking away this product from the
American people and pushing them into actual nonbank predatory lenders
and usurious products.
As was mentioned earlier, the Federal Reserve Bank of New York has
already concluded that overdraft fee caps hamper, rather than foster,
financial inclusion. The consequences of the rule have been studied,
and it is evident that this cap would harm consumers by limiting their
access to necessary financial services.
Finally, this idea that smaller banks and credit unions are
unaffected by the rule is simply wrong. While institutions with less
than $10 billion in assets are purportedly excluded from the rule, they
will still be forced to deal with this cap just to stay competitive.
The truth is it is the big banks they are protecting. The big Wall
Street banks can afford to go without these fees. It is the community
banks in our neighborhoods and in our communities who can't afford to
provide this product without the fees.
Mr. Speaker, just in conclusion, this is a real-life testimonial
about the value of these overdraft protections from a community bank in
my district:
We have a customer with two children and a husband in the
military. As you know, things can be difficult when one
parent is deployed and one parent is alone with children,
trying to manage finances, school, after-school activities,
and church.
As the customer said, things can be overwhelming, even
exclusive of her husband's deployment. This customer
approached me in church with her head down, saying that she
was having a tough time with things. Some expenses surprised
her, and she was suddenly out of money for the month. She was
okay, as she had groceries, gas, and her bills paid, until
she got a flat tire on the way to a school function. She got
the car to the tire shop.
The SPEAKER pro tempore (Mr. Wied). The time of the gentleman has
expired.
[[Page H1524]]
Mr. HILL. Mr. Speaker, I yield an additional 30 seconds to the
gentleman from Kentucky.
Mr. BARR. Mr. Speaker, I will finish the story.
The tire was irreparable. She had to buy a new tire for a
couple of hundred dollars she didn't have. She was not able
to keep up with her car. She had to buy the new tire. There
was no choice.
She ran her debit card, and it covered the tire. The family
went home. She checked her account when she got home,
wondering how it was paid for, when she didn't have the money
in it. It was her overdraft that covered it. She thanked me
that her community bank was there for her to cover her
overdraft so she could keep moving without having to call for
help.
Mr. Speaker, needless to say, the banker was tremendously humbled
that she was able to help this mother out due to the overdraft. They
are there in time of need.
Ms. WATERS. Mr. Speaker, I yield 3 minutes to the gentlewoman from
Massachusetts (Ms. Clark), the Democratic whip.
Ms. CLARK of Massachusetts. Mr. Speaker, remember when the GOP
promised to lower the cost of living? It really wasn't that long ago.
Today, we have a tax on cars. We have a tax on coffee. We have a tax
on the eggs we import to fill the empty shelves. We have a tax of 125
percent on clothes, toys, and electronics.
What does this all add up to? It adds up to a tax of $4,600 a year on
American families. While Trump shrugs at all those rising costs, he
certainly wants us to know this. While all this was happening to
American families, he wanted us to know that he won his Senior Club
Championship golf tournament.
What are House Republicans doing?
Are they voting to cancel these taxes? No, they are carving them into
stone, prohibiting us from revealing them, no matter how painful they
get. Then they are pushing the costs even higher. Today, they are
voting to raise overdraft fees.
After crashing the economy, eliminating jobs, and destroying people's
retirement savings, they are making it more expensive to be short on
money by $225 a year per family. Also, the banks can pocket more, which
is their priority.
Later today, Republicans will be back on their tax plan, the one
where they take deserving taxpayer dollars and give them to the
billionaire class in the form of tax cuts for them.
By defunding Medicaid, the largest healthcare program in our country,
by defunding food programs that feed 15 million children, by
dismantling Social Security, firing veterans, closing and cutting
public schools, and abandoning special needs children, the rich will
get richer. That is who they work for.
Mr. Speaker, we will continue to work and vote for working people,
and we will vote ``no'' on this budget.
Mr. HILL of Arkansas. Mr. Speaker, I yield 1 minute to the gentleman
from Indiana (Mr. Stutzman), who brings his entrepreneurship and State
legislative practice. He is a former Congressman returning to the House
Financial Services Committee.
{time} 1400
Mr. STUTZMAN. Mr. Speaker, I thank the chairman for his hard work.
Mr. Speaker, I rise today in support of the resolution disapproving
of the rule submitted by the CFPB relating to overdraft lending very
large financial institutions.
The CFPB's purpose is to implement and enforce consumer financial
protection laws and ensure that consumers have access to financial
services and products while ensuring fair, transparent, and competitive
markets.
The overdraft lending rule issued by the CFPB instead harms consumers
by setting government price caps on overdraft fees. Setting these caps
and requiring large banks to lower their overdraft fees will force
smaller and community banks to follow suit, resulting in less options
for our constituents.
Overdraft fees are provided by banks for people who are caught in a
bind. Hoosiers who need to make emergency payments should not be turned
away at the register because this rule forced their bank to stop
offering overdraft services. This government-created market established
by the CFPB's overdraft lending rule ignores competition of banks and
how they provide their services and pushes banks to restrict or exit
this service.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. HILL of Arkansas. Mr. Speaker, I yield an additional 30 seconds
to the gentleman from Indiana.
Mr. STUTZMAN. Mr. Speaker, the former CFPB Director Chopra was not
thinking about consumers when he implemented this midnight rule on his
way out the door. I am proud that House Republicans and President Trump
have the opportunity to right this egregious wrong implemented under
the Biden administration.
These shouldn't be called fees. They should be called insurance for
our constituents.
Mr. Speaker, I urge my colleagues to support this resolution.
Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I am having a hard time here trying to figure out what
is going on in this country. We are here taking up all of this time
talking about $5 and talking about trying to limit the fees that people
are being charged. We are saying: Let's help our consumers. Let's help
our constituents and stop having them become victims of these huge fees
that have been charged by the banks.
They say that a lot of banks are not charging them, but still, they
are fighting $5 that we are trying to limit these fees for. We said
that all we are asking you to do is to let the people know exactly what
you are doing about fees.
How much are you charging them?
I don't know what is going on. I don't know what is going on with
them, and I don't know what is going on with the President of the
United States of America.
He has put us in a chaotic situation. For example, I just got word
that he has changed his mind about tariffs. We were all trying to
convince this administration that they should not be raising the
tariffs on all of these countries and the fact that they were even
harming our relationship with our allies, but no. He placed tariffs on
every country in the world, even for an island that had nothing but
penguins on it.
So today what he said was: Oh, I changed my mind. I am going to raise
the tariffs on China, but I think I will put a 90-day pause on all of
the stuff that I did raising these tariffs for all these other
countries just a few days ago.
When we think about the chaotic situation that we are in while we are
here talking about $5, Mr. Speaker, you know that this President fired
our nuclear experts from the National Nuclear Security Administration.
So here we are without the protection of the experts to let us know
what should be done to make sure that we don't have nuclear power
destroying us all.
After firing them, they discovered they had made a big mistake. So
guess what, Mr. Speaker? They called them back. However, they couldn't
find them because they had erased their addresses. So they looked and
looked and looked until they could beg them to come back.
Then there were thousands of employees at the National Institutes of
Health and Centers for Disease Control and Prevention during the bird
flu outbreak that were fired. They were fired when we were facing
another pandemic.
Mr. Speaker, they have forced seniors to go in person to apply for
Social Security. I am so worried about our seniors and Social Security.
He promised us that he would not cut Social Security, but what he did
was he destroyed the infrastructure of Social Security. He fired people
and shut off the telephones making them go in person to find their
Social Security office, which they are closing all of them down. Now
all of our Social Security and our seniors are at stake not knowing
what is going to happen and not knowing how to get in touch with the
Social Security personnel who work there to get these questions
answered. I could go on and on about this Cabinet sharing war plans on
Signal chats.
Do I have to tell you more about the chaos, Mr. Speaker, the
disruption? Do I have to tell you more about the uncertainty and the
situation that we find ourselves in, Mr. Speaker?
We are here trying to place a lid on these overdraft fees because
people don't know whether or not they are going to have a job to pay
anything let alone the overdraft fees. They are not going to have money
to put food on the table, to make sure that the children
[[Page H1525]]
have clothing to go to school and to dress properly and all of that.
Mr. Speaker, for $5, we are here because they refuse to agree that
there should be a cap on overdraft. If they want to charge more, we
give them an out. They can do it in two ways. They can just tell the
people that this is what they are doing, they want to increase for
whatever reason, or they can calculate what they say their costs are
for being able to provide overdraft fees and that they have to have a
little more than $5. I don't know where we are going with all of this.
I am totally disgusted, $5.
Mr. Speaker, I reserve the balance of my time.
Mr. HILL of Arkansas. Mr. Speaker, I would like to inquire of my good
friend from California if she has any other speakers. I am prepared to
close, and I reserve the balance of my time.
Ms. WATERS. Mr. Speaker, I have no further speakers, and I yield
myself the balance of my time for the purpose of closing.
Mr. Speaker, when did it become unpopular to put more hands in the
pockets of working families?
This resolution will cost American families $5 billion a year or
about $250 per household in higher overdraft fees. No one in America
wants to send a $250 check to the biggest banks every year.
To put this debate into perspective, Republicans spent a lot of time
last Congress attacking a big bank capital rule called Basel III
endgame. Republicans convened one dozen hearings on the topic and
repeatedly referred to the 426 comments the public made on the
proposal.
Mr. Speaker, do you know how many comments the CFPB received on the
overdraft rule? They received more than 48,000 complaints, most of
which strongly supported the rule which is more than 100 times the
number of comments on the capital rule.
Consumers are just fed up with these types of junk fees, and the last
thing they want is for Congress to raise them.
Mr. Speaker, I urge all Members to join Senate bipartisan opposition
to this resolution and vote ``no.'' Stand up for our constituents.
Stand up for the people who depend on us every day to make sure they
too can have a decent quality of life.
We are watching what Trump and Musk are doing, aligned with the
billionaires who want more and more money and don't want to pay their
taxes, and we are here fighting about $5.
Give me a break. I guess enough has been said.
Mr. Speaker, I yield back the balance of my time.
Mr. HILL of Arkansas. Mr. Speaker, I yield myself the balance of my
time.
Mr. Speaker, I thank my friends on this side of the aisle who have
worked hard today, Mr. Speaker, to convince everybody in this body that
this is a serious overreach by the CFPB in a Federal price mandate.
Instead of letting consumers choose their financial institution and
choose which one has the lowest overdraft fees and the best consumer
accounts, instead we have the Federal Government trying to tell people
what the price can be. It is Federal price-fixing.
What the opposition has argued today is that these fees are hidden.
They are not. Consumers opt into this product, Mr. Speaker. They know
what the fee is because it is disclosed to them. It is required by
Federal law today to disclose it under regulation DD.
This is about access for overdraft protection. One of my colleagues
called it overdraft protection insurance so that they don't make a
mistake and miss a mortgage payment, a rent payment, or a utility
payment that causes higher costs, higher fees, and higher interest
rates.
Two-thirds of consumers support overdraft protection products. Two-
thirds of consumers think a reasonable fee is appropriate. Competition
has brought down fees for years. In fact, many large banks don't even
charge for overdraft protection.
The assertion that consumers complain about this all the time, Mr.
Speaker, I am sorry, I don't find the evidence to that. Even the
Consumer Financial Protection Bureau's own database shows that less
than 1 percent of consumer complaints over this past decade even
reference this kind of a product.
This is not a junk fee. This is an overdraft protection that helps
millions of families across the country manage their payments and their
bills between paychecks. It should be competitive and it should be
accessible. We should vote ``yes'' on this resolution so that we agree
with the Federal Reserve of New York when they say that to cap this fee
to do price intervention here is to deny credit and deny this product
to the hardest working families in America.
Mr. Speaker, I urge a ``yes'' vote, and I yield back the balance of
my time.
The SPEAKER pro tempore (Mr. Womack). All time for debate has
expired.
Pursuant to House Resolution 294, the previous question is ordered on
the joint resolution.
The SPEAKER pro tempore. The question is on the third reading of the
joint resolution.
The joint resolution was ordered to be read a third time, and was
read the third time.
The SPEAKER pro tempore. The question is on passage of the joint
resolution.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. HILL of Arkansas. Mr. Speaker, on that I demand the yeas and
nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this question will be postponed.
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