Rep. Hill files resolution to overturn cap on bank overdraft fees | News

On December 12, 2024, the Consumer Financial Protection Bureau (CFPB) announced the policy, which aimed to “close an outdated overdraft loophole that exempted overdraft loans from lending laws,” according to a news release from the CFPB. “The agency’s final rule on overdraft fees applies to the banks and credit unions with more than $10 billion in assets that dominate the U.S. market. The reforms will allow large banks several options to manage their overdraft lending program: they can choose to charge $5, offer overdraft as a courtesy by charging a fee that covers no more than costs or losses, or continue to extend profit-generating overdraft loans if they comply with longstanding lending laws, including disclosing any applicable interest rate. The final rule is expected to add up to $5 billion in annual overdraft fee savings to consumers, or $225 per household that pays overdraft fees.”

Hill and Senator Tim Scott (R-SC) introduced the resolution on February 13, 2025.

“Senate Banking Committee Chairman Tim Scott and I were clear when we told federal agencies – including the CFPB – to stop all midnight rulemaking, which former Director Chopra blatantly disregarded. As I have consistently said, the CFPB needs guardrails on its enforcement and rulemaking powers, and this rule is another clear example of why. The CFPB’s actions on overdrafts are another form of government price control that hurt consumers who deserve financial protection and greater choice. Our CRA will help overturn this harmful rule and is the next step toward ensuring the CFPB halts all ongoing rules until it answers to Congress, just like any other non-independent federal agency. Chairman Scott and I will continue to work with our fellow Republicans to rein in the agency with statutory direction,” Hill stated in a press release from the House Financial Services Committee, which he now serves as the chairman of.

Hill was joined on the resolution by Reps. Bill Huizenga (R-MI), Ann Wagner (R-MO), Andy Barr (R-KY), Roger Williams (R-TX), William Timmons (R-SC), Ralph Norman (R-SC), Dan Meuser (R-PA), Byron Donalds (R-FL), Andy Ogles (R-TN), Maria Salazar (R-FL), Troy Downing (R-MT), Mike Haridopolos (R-FL), Tim Moore (R-NC), and Glenn Grothman (R-WI). Senators Mike Crapo (R-ID), Roger Wicker (R-MS), Jim Risch (R-ID), Jerry Moran (R-KS), John Boozman (R-AR), Thom Tillis (R-NC), Kevin Cramer (R-ND), Cynthia Lummis (R-WY), Bill Hagerty (R-TN), Katie Boyd Britt (R-AL), and Pete Ricketts (R-NE) co-sponsored  Scott’s resolution.

Rohit Chopra, the CFPB Director under Biden, said banks were exploiting a loophole to take money from citizens’ deposit accounts.

“For far too long, the largest banks have exploited a legal loophole that has drained billions of dollars from Americans’ deposit accounts,” said Chopra.