WASHINGTON — Senate Democrats, led by Banking Committee ranking member Elizabeth Warren, D-Mass, wrote to a group of more than 20 banks seeking information on how Congress' nullification of the Consumer Financial Protection Bureau's overdraft fee rule will affect their businesses.
The Biden administration made overdraft fees a center of its work at the Consumer Financial Protection Bureau, alongside other so-called junk fees. The CFPB capped overdraft fees at $5, a move that immediately drew lawsuits and pushback from bankers.
Congress, under Republican control, voted to nullify the CFPB's overdraft rule using the Congressional Review Act, which was
The lawmakers — Sens. Bernie Sanders, I-Vt., Richard Blumenthal, D-Conn., and Warren — asked the institutions to reply with answers to a range of questions, including whether the banks intend to raise overdraft fees after the rule's demise, whether they planned to implement the rule and how much revenue they expect to generate now that the rule has been nullified.
"This will hurt hardworking Americans already struggling to make ends meet, allowing banks to continue exploiting consumers with sky-high overdraft fees," the lawmakers said in their letters to the banks. "Overdrat fees are the source of tens of millions of bank account closures, meaning this law will likely increase debanking, running counter to President Trump's stated goal of reducing debanking."
The lawmakers sent the letters to 25 different banks, including some of the country's largest institutions like JPMorgan, Wells Fargo, Truist and PNC.
They also pressed smaller institutions that they said have outsized overdraft fees, including Woodforest National Bank, a small Texas-based institution that's known for its work with Walmart ATMs, and Arvest, another Walmart-connected institution.
The progressive lawmakers have little ability to push the overdraft fee issue during this Congress, or likely under this administration, but the letter lays the groundwork for an argument about the impact of the rule's nullification if they regain a majority.
If banks are increasing overdraft fees or report jumps in overdraft revenue, that could serve to bolster Democrats' argument that the Trump administration's attempted dissolution of the CFPB is harming everyday Americans. The Trump administration plans to fire most of the bureau staff after a federal
