The House Financial Services Committee, under the leadership of Chairman French Hill (AR-02), is reviewing H.J. Res 59. This resolution disapproves a rule submitted by the Bureau of Consumer Financial Protection concerning "Overdraft Lending: Very Large Financial Institutions." The rule, issued by the Consumer Financial Protection Bureau (CFPB), effectively imposes government price controls on overdraft fees.
Experts and supporters of the committee's efforts have voiced their opinions on this matter. A study from the Federal Reserve Bank of New York indicates that while fee caps reduce overdraft fees, they also lead banks to make adjustments that limit financial inclusion for low-income households. The study suggests that policies promoting competition and transparency might be more effective in aligning overdraft fees with costs and risks.
The American Bankers Association, along with 52 state bankers associations, expressed concerns that if Director Chopra’s rule is not invalidated, banks may restrict or eliminate access to overdrafts. This could harm consumers who rely on these services for short-term liquidity needs. They emphasize that consumers value their institution's overdraft programs as they prevent returned or declined payments.
Americans for Tax Reform criticized the CFPB's basis for proposing the rule, arguing it lacks merit and creates market distortions by imposing arbitrary price controls on financial institutions.
America's Credit Unions warned that the final rule could harm consumers struggling with financial security by making financial services less available or more expensive. They argue that credit unions offer overdraft programs because members need them to manage financial challenges.
Consumer Bankers Association President and CEO Lindsey Johnson described the rule as an overreach, stating it threatens to cut off access to essential bank products relied upon by many Americans without access to credit.
Defense Credit Union Council Chief Advocacy Officer Jason Stverak highlighted how regulatory overreach threatens credit unions' stability and fails to recognize the value of overdraft protection as a financial tool for military families facing unique challenges.
Independent Community Bankers of America President & CEO Rebecca Romero Rainey noted that the CFPB’s rule could force community banks to stop offering overdraft services, resulting in more bounced checks and declined transactions. This could reduce service access and push unbanked consumers toward predatory options.
The National Taxpayers Union argued that the CFPB ignored industry efforts to assist Americans in need and imposed a harmful rule on the industry. They claim this will hinder innovation and limit competition within banking services.
Finally, the U.S. Chamber of Commerce and Mississippi Economic Council suggested that reduced fee income from large institutions charging no more than $5 per overdraft might lead them to end consumer-friendly features currently offered as part of discretionary programs.