The Consumer Financial Protection Bureau’s (CFPB) final rule capping overdraft fees is set to be repealed after the House of Representatives voted Wednesday (April 9) to disapprove it.
The House passed the joint resolution (S.J.Res.18) by a 217-211 vote, according to the website of the Office of the Clerk of the House of Representatives.
With one exception, the yes votes came from Republicans and the no votes came from Democrats. Rep. Ryan Mackenzie, R-Pa., voted no.
The House vote marked final approval of the bill in Congress, as the Senate passed it last month in a 52-48 vote. The bill now goes to President Donald Trump for his signature.
The CFPB unveiled its overdraft fee rule, “Overdraft Lending: Very Large Financial Institutions,” on Dec. 12, saying it aimed to close what it called an “outdated overdraft loophole” in lending laws.
The rule, set to take effect Oct. 1, applies to banks and credit unions with assets exceeding $10 billion. It requires affected institutions to choose one of three options for their overdraft programs: cap overdraft fees at $5; set fees to cover only costs and losses; or comply with standard lending laws.
Following Wednesday’s House vote to repeal the rule, Rep. French Hill, R-Ark., chairman of the House Financial Services Committee, said that the move will “reverse this midnight rulemaking by the Biden-Harris Administration’s CFPB.”
“This government price control on overdraft fees would have limited consumer choice and been detrimental to the families who need the certainty that their purchases will not be denied at the cash register,” Hill said in a Wednesday press release. “The market has already been successful in lowering fees for all Americans, and I am proud to send this CRA [Congressional Review Act] to the President’s desk to correct this government overreach.”
Rep. Maxine Waters, D-Calif., the ranking member of the House Financial Services Committee, said on the House floor before the vote that repealing the CFPB’s rule would raise fees charged to consumers by the nation’s largest banks.
“Whether you like the CFPB or not, it doesn’t make any sense to hike bank fees on 23 million hard-working families,” Waters said, referring to the number of American households that incur overdraft fees each year, according to a press release.
