Congress moves to unwind two major CFPB rules, rewriting the future for banks and Big Tech.
The House of Representatives voted Wednesday to overturn two significant rules finalized by the Consumer Financial Protection Bureau during the final days of the Biden administration:
- A cap on overdraft fees charged by large banks, limiting them to $5.
- Supervisory oversight over digital payment apps operated by Big Tech companies like Apple, Google, and Meta.
Both measures had already passed the Senate last month and now await President Trump’s signature. Many in the industry are hoping for a similar fate with the CFPB’s medical debt credit reporting rule.
Catch up quick:
- The resolution to block the overdraft fee rule passed the House 217–211, largely along party lines.
- The measure repealing CFPB’s authority over payment apps passed 219–211, with Republicans unified in support and Democrats unified in opposition.
Why it matters: These Congressional Review Act (CRA) resolutions not only nullify the rules but also bar the CFPB from issuing “substantially similar” regulations in the future — locking in the rollback.
Details:
- Overdraft Fee Rule:
The CFPB’s rule targeted banks with over $10 billion in assets, aiming to cap overdraft fees at $5 unless banks could demonstrate higher costs. According to the CFPB, the rule would have saved consumers roughly $5 billion annually by cutting the average $35 overdraft fee. A coalition of 22 attorneys general and the District of Columbia opposed the resolution, arguing that overturning the rule would prioritize bank profits over consumer protection. - Payment App Oversight Rule:
The CFPB’s “larger participant” rule would have subjected companies processing more than 50 million transactions annually — including Venmo, Cash App, Google Pay, and Apple Pay — to agency supervision.
Consumer advocates warned that eliminating this oversight would leave users vulnerable to fraud and privacy risks.
What they’re saying:
- Rep. Mike Flood [R-Neb.], who led the House effort, said the payment app rule was an “overreach” designed to expand CFPB authority over nonbank firms.
- Rep. Maxine Waters [D-Calif.], ranking member of the House Financial Services Committee, criticized the move, arguing that the CFPB should supervise Big Tech to ensure compliance with consumer protection laws.
- Rep. French Hill [R-Ark.] called the overdraft fee cap a “government price control” that would have harmed consumers by limiting banking options.
- Consumer groups like the National Consumer Law Center said Congress’s actions would make it harder and more expensive for struggling Americans to access basic financial services.
Zoom out: The resolutions are part of a broader Republican effort to undo Biden-era regulatory actions. If President Trump signs them — as expected — the CFPB’s authority will be significantly curtailed in two important sectors: overdraft fee regulation and digital payments.
Between the lines: Banks, while opposing the overdraft cap, had generally supported CFPB oversight of Big Tech payments apps — an unusual twist that aligned traditional banks with consumer protection advocates on one issue.
What’s next:
