Today, the House of Representatives passed two CRAs overturning Consumer Financial Protection Bureau (CFPB) rules finalized in the waning days of the Biden-Harris Administration. S.J. Res. 18 nullifies the CFPB’s disastrous rule setting government price caps on overdraft fees and S.J. Res. 28 would nullify the CFPB’s deeply flawed rule expanding the CFPB's authority into the digital payments ecosystem.
S.J. Res. 18 – Disapproving the rule submitted by the Bureau of Consumer Financial Protection relating to “Overdraft Lending: Very Large Financial Institutions,” passed the House 217 to 211.
“I am proud to see House and Senate Republicans take action to 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. The market has already been successful in lowering fees for all Americans, and I am proud to send this CRA to the President’s desk to correct this government overreach,”said Chairman French Hill (AR-02).
"It is no secret that the sky was the limit when it came to regulations for the last administration. Our nation endured four years of costly new rules - rules that continue to wreak havoc on our economy and stunt economic growth. Indeed it's going to take some time to undo the mess from the last White House. Senate Joint Resolution 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, but it also stands to harm the very people it purports to protect," said Rep. John Rose (TN-06).
"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," said Rep. Troy Downing (MT-02).
"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 would take away this critical lifeline away from many of my 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're not coerced. They make an informed decision knowing that a small, predictable fee prevents from severe consequences like a bounced check or late fees," said Rep. Andy Barr (KY-06).
S.J. Res. 28 – A joint resolution disapproving the rule submitted by the Bureau of Consumer Financial Protection relating to "Defining Larger Participants of a Market for General-Use Digital Consumer Payment Applications," passed the House 219 to 211.
"This is a midnight rule created by the Consumer Financial Protection Bureau and it's overly broad and imprecise. It treats a wide variety of digital payment applications, peer-to-peer apps, digital wallets, e-commerce tools, as though they are identical, simply because they facilitate payments and serve a large number of users. But these products are not the same. They serve different models, operate under different rules, and pose different kinds of consumer risks. This kind of regulatory overreach is bad enough on its own, but what makes this rule especially concerning is the process by which it was created. The CFPB's approach to carry out this rulemaking is a clear example of undemocratic and unjustified action," said Chairman Hill.
"The CFPB finalized this rule in the eleventh hour in January, days before the transfer of power, well after other agencies stopped their rulemaking. The rule itself is effectively a regulatory power grab by the CFPB's outgoing Biden nominee, Mr. Chopra. By designating companies engaged in payment activities as larger participants, the bureau will get to expand their examination authority over an ill-defined group of firms with payment tools. Given our track record, I think it's fair to say we should not be supporting greater exam reach for the CFPB," said Rep. Mike Flood (NE-01).
"This is a textbook case of regulatory overreach. It stems from a flawed process and applies an overly broad approach that blurs important distinctions between very different products and services in the digital economy. Rather than taking a thoughtful, and tailored approach, the CFPB opted for a sweeping rule that treats all digital payment services as if they are the same, ignoring critical differences for consumers as well as providers," said Rep. Tim Moore (NC-14).
