DISAPPROVING THE RULE SUBMITTED BY THE BUREAU OF CONSUMER FINANCIAL PROTECTION RELATING TO "OVERDRAFT LENDING: VERY LARGE FINANCIAL INSTITUTIONS"

On 2025-04-09, Representative Troy Downing (R-MT-2) delivered a floor speech titled "DISAPPROVING THE RULE SUBMITTED BY THE BUREAU OF CONSUMER FINANCIAL PROTECTION RELATING TO "OVERDRAFT LENDING: VERY LARG" in the House.

DISAPPROVING THE RULE SUBMITTED BY THE BUREAU OF CONSUMER FINANCIAL PROTECTION RELATING TO "OVERDRAFT LENDING: VERY LARGE FINANCIAL INSTITUTIONS"

Congressional Record, Volume 171 Issue 64 (Wednesday, April 9, 2025) [Congressional Record Volume 171, Number 64 (Wednesday, April 9, 2025)] [House] [Pages H1519-H1525] From the Congressional Record Online through the Government Publishing Office [ www.gpo.gov ] DISAPPROVING THE RULE SUBMITTED BY THE BUREAU OF CONSUMER FINANCIAL PROTECTION RELATING TO ``OVERDRAFT LENDING: VERY LARGE FINANCIAL INSTITUTIONS'' Mr. HILL of Arkansas. Mr. Speaker, pursuant to House Resolution 294, I call up the joint resolution (S.J. Res. 18) disapproving the rule submitted by the Bureau of Consumer Financial Protection relating to ``Overdraft Lending: Very Large Financial Institutions,'' and ask for its immediate consideration in the House. The Clerk read the title of the joint resolution. The SPEAKER pro tempore. Pursuant to House Resolution 294, the joint resolution is considered read. The text of the joint resolution is as follows: S.J. Res. 18 Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That Congress disapproves the final rule submitted by the Bureau of Consumer Financial Protection relating to ``Overdraft Lending: Very Large Financial Institutions'' (89 Fed. Reg. 106768 (December 30, 2024)), and such rule shall have no force or effect. The SPEAKER pro tempore. The joint resolution shall be debatable for 1 hour, equally divided and controlled by the chair and ranking minority member of the Committee on Financial Services or their respective designees. The gentleman from Arkansas (Mr. Hill) and the gentlewoman from California (Ms. Waters) each will control 30 minutes. The Chair now recognizes the gentleman from Arkansas (Mr. Hill). General Leave Mr. HILL of Arkansas. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days to revise and extend their remarks and include extraneous material on the resolution under consideration. The SPEAKER pro tempore. Is there objection to the request of the gentleman from Arkansas? There was no objection. Mr. HILL of Arkansas. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise in support of this joint resolution of disapproval. Today, we can protect consumers and ensure continued access to financial services by voting to nullify the Consumer Financial Protection Bureau's disastrous rule on overdraft fees. In a time burdened by the 40-year-high inflation, when many middle- and low-income households are living paycheck to paycheck, ensuring Americans have access to affordable credit has never been more important. Overdraft protection is an optional service that financial institutions provide to help consumers avoid having purchases declined. Instead of the transaction being denied, the bank or credit union charges a flat fee to cover the check on behalf of that consumer. It lets that purchase proceed. It lets that payment to a utility company proceed. It lets that payment for an important rent or mortgage company to proceed, thereby allowing American families to take care of essential needs like that mortgage payment, rent payment, groceries, or gas before their next paycheck arrives. Over the last decade, competition has driven financial institutions to lower their overdraft privilege fees to retain customers. Innovation has made accidental overdrafts less likely as many financial institutions now offer low balance alerts, automatic transfers from savings, and other tools to help consumers avoid being in overdraft and better manage their financial cash flow. Competition and innovation, not government-mandated price caps, remain the best way to ensure consumers have access to affordable financial products and services. Unfortunately, this CFPB rule undermines this very approach and threatens to restrict access to credit and overdraft privileges, which all of us should be concerned about. The CFPB's rushed and haphazard approach to the rule is a clear example of how not to regulate. The CFPB made this decision before conducting meaningful research or considering the real-world consequences of its actions. The CFPB's rule imposes a government-mandated price cap on what financial institutions may charge in the way of a fee for an overdraft privilege. Like all price caps, this would reduce the availability of these very overdraft services, especially, Mr. Speaker, for consumers who have lower credit scores or are considered high risk. By doing so, it effectively limits access to credit and that overdraft privilege for those who need it the most at the time they need it the most. The CFPB's failure to consider the cost associated with this regulation, especially the real-world impact on consumers, their local community's financial institution, and the broader financial system only underscores the need to stop this price control before it is too late. The CFPB also creates a false narrative of choice by suggesting that banks and credit unions can either offer an overdraft service at this federally mandated price fixed cost of $5 or comply with extending that as credit and, therefore, complying with the Truth in Lending Act. In other words, actually underwriting a consumer loan instead of simply offering the overdraft--simple, straightforward, fast, overdraft fee. This redefinition of what products and services constitute credit thus is problematic, especially since Congress has already defined credit for regulatory purposes. Even more troubling is the way the CFPB oversimplifies the costs of providing overdraft protection. The rule only considers the cost of operating a call center and ignores the many other expenses involved such as ratifying and dealing with consumer disputes, mailing and postage for overdraft notices, third-party collection expenses, technology costs, and cost of regulatory compliance. The reality is that these additional costs make it increasingly difficult for banks to continue offering overdraft protection. Many will simply choose to stop providing the service altogether. Those who will suffer the most from this are the very people the rule is designed to protect. Mr. Speaker, in 2023, a survey found that 92 percent of customers who were aware their balance wouldn't cover a transaction preferred paying the overdraft fee rather than having their transaction declined. Not only is it inconvenient or potentially embarrassing in a particular situation, but it is also fundamental to in-between paycheck cash flow. They are making the decision to go into overdraft so they make that mortgage payment on time, despite buying clothes for back to school and trying to do Christmas shopping. {time} 1315 In my experience with my customers, over my many years of working with families, I never found one who was not a worthy steward of how to use these services. Another survey found that 64 percent of customers think it is reasonable for a bank to charge an overdraft fee, and 72 percent feel these fees are justified, particularly when it helps them ensure timely payment of a much larger important bill, like a mortgage or rent. In my experience of helping families across rural Arkansas for many years, as I said, managing their finances, they are pretty smart about how to do that, Mr. Speaker. The truth is if the consumers lose access to overdraft protection, they will be forced to turn to alternative sources of credit that may be more expensive and riskier, have less consumer protection and documentation, and be less holistically handled than they would be at their home community financial institution or credit union. I encourage all of my colleagues to support this resolution to restore common sense to our regulatory framework and ensure that consumers continue to have access to the financial services on which they rely. Mr. Speaker, I reserve the balance of my time. Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise in complete opposition to yet another harmful bill put forth by Republicans, S.J. Res. 18, a resolution to allow the biggest banks to increase fees on their customers. You heard me right. I said this resolution will increase bank fees, and it will [[Page H1520]] impact 23 million households, or roughly 1 in 5 households, that incur overdraft fees each year. Despite Trump and Republican campaign promises to lower prices, the President decided to launch a global trade war just last week that wiped out a 2-day record of $6.6 trillion of wealth, affecting the retirement savings of millions of Americans. Moreover, the Fed Chair has said these policies will fuel higher inflation by sending the prices of consumer goods up. It doesn't seem like the President cares about prices anymore, saying: ``I couldn't care less. I hope they raise their prices because, if they do, people are going to buy American-made cars. We have plenty.'' Trump doesn't care that prices for cars and other goods will rise significantly. We are here today because Republicans now want to overturn a rule that limits bank overdraft fees to $5, down from $35 or more, and saves consumers $5 billion a year. Not surprisingly, more than 80 percent of Americans, including Republicans, want to get these high overdraft fees under control, yet Republicans will vote to take off the limits on these fees and say that higher fees are good for America. Let's clear up a few myths. The Consumer Financial Protection Bureau's rule does not ban overdraft fees. Rather, it sets a reasonable limit at $5 per overdraft charged by the biggest banks in America. Despite what opponents may claim, the rule does not impose a hard cap on this fee. It provides flexibility for large banks to charge more if their estimated costs and losses in providing this service are higher than $5. The rule even allows big banks to charge higher fees if they provide a simple, upfront disclosure to consumers. Think about that. Why is it if you want to charge more money than the $5, you don't want to tell your customers that y

Referenced legislation: SJRES18, SJRES18, HRES294