Statement: New rules on overdrafts and payment apps overturned

Congress leaves consumers vulnerable to unfair fees, payment app fraud

WASHINGTON — The U.S. House of Representatives on Wednesday passed resolutions to overturn critical consumer protections established by the Consumer Financial Protection Bureau (CFPB) regarding overdraft lending and payment apps. 

The overdrafts rule targeted only the largest banks and credit unions—those with more than $10 billion in assets—requiring them to choose from three fairer pricing options: charge a $5 fee, charge a fee that covers their costs, or charge a profit-generating fee that complies with existing credit laws, such as fee disclosure requirements. 

The payment apps rule would have subjected non-bank big tech payment apps (that process more than 50 million transactions annually) to the same oversight as banks and credit unions, ensuring compliance with privacy laws and consumers’ rights to dispute incorrect or fraudulent transactions. 

The Congressional Review Act (CRA), passed in 1996, allows Congress to introduce a “resolution of disapproval” to reconsider and overturn certain federal rules within 60 Congressional days of the Federal Register publishing them and Congress receiving them. 

In response, PIRG’s Consumer Campaign Director Mike Litt released the following statement:

“These votes leave consumers vulnerable to excessive overdraft fees and with little recourse when victimized by payment app fraud.

“The CFPB’s overdrafts rule was designed to ensure fair access to overdraft coverage. Instead, Congress has given large banks a blank check to keep raking in billions of dollars a year from customers who can’t afford to lose money.”