March 28, 2025
Underneath President Joe Biden, the Client Monetary Safety Bureau (CFPB) instituted a $5 cap on financial institution overdraft charges.
Senate Republicans have voted to let banks reap the benefits of People by repealing the cap on overdraft charges, due to laws put ahead by Sen. Tim Scott.
Underneath President Joe Biden, the Client Monetary Safety Bureau (CFPB) instituted a $5 cap on financial institution overdraft charges. Thursday, Senate Republicans voted 52-48 in favor of laws that will repeal the cap for banks.
Scott, the chairman of the Senate Banking Committee, argued for the decision on the Senate flooring, saying that eradicating the CFPB’s cap can be “good for shoppers.”
The one Republican who voted no and joined Democrats in opposing the decision stated, “Why would we assist the massive banks on the expense of working folks?”
Client advocates are simply as baffled.
“The CFPB’s rule imposes cheap limits that defend shoppers from unfair charges whereas enabling banks to cowl their prices,” Chuck Bell, advocacy program director at Client Experiences, informed Bloomberg. “Repealing the CFPB’s overdraft price limits will harm working households who’re already combating excessive costs and inflation.”
Whereas that is unhealthy information for shoppers and most People, banks are celebrating. The American Bankers Affiliation filed a lawsuit in December, alleging that the CFPB overstepped its authority. Whereas then-CFPB Director Rohit Chopra stated the cap on overdraft charges would save shoppers $5 billion a 12 months, the affiliation argued the cap truly hurts shoppers, Rolling Stone reviews.
Republicans Sign That CFPB Will Be Eradicated
The transfer from Senate Republicans alerts one thing darker underneath the Trump administration: the CFPB could possibly be no extra.
In February, billionaire Elon Musk, head of the extremely criticized Division of Authorities Effectivity (DOGE), wrote on X, “CFPB RIP.”
Musk, who has been tasked with chopping U.S. authorities jobs and federal spending underneath DOGE, stated in a follow-up publish that the CFPB “did above zero good issues” however “nonetheless must go.”
Now that the decision has handed within the Senate, it heads to the GOP-led Home.
RELATED CONTENT: Say No to Overdraft Charges