Senate Passes Resolution Repealing CFPB Overdraft Rule; House Action Awaits

Last week, the U.S. Senate voted to repeal the final rule from the Consumer Financial Protection Bureau (CFPB) to cap rate fees. The Senate passed Banking Committee Chairman Tim Scott’s (R-S.C.) Congressional Review Act (CRA) resolution to overturn the final rule, which Scott said would leave more Americans unbanked and with less access to financial services. 

“I want every single hardworking American to have access to our financial system. That sometimes includes… free checking,” Scott said. “A free checking account is not free, but with the revenue streams coming into the institutions, they can use those revenues as an option to provide free checking for those living paycheck to paycheck.”

The votes were cast along party lines with one exception, with 52 Republicans voting yes and 45 Democrats voting no. Senator Josh Hawley (R-Mo.) voted no alongside two independent senators, according to the New York Times. The CRA allows Congress to review federal agencies’ new rules and develop a resolution of disapproval that means the rule cannot take effect. 

Senator Elizabeth Warren (D-Mass.), ranking member of the Senate Banking Committee, took to social media platform X to highlight that every Senate Democrat voted against the CRA. “Senate Republicans would rather you didn’t find out they just voted to give the biggest banks billions in profits from overdraft fees that kick working people when they’re down,” she said. 

The resolution was slated to be voted on in the House of Representatives this week, but after nine House Republicans voted with Democrats against a procedural measure, all floor activity was ended and members returned home for the week. At issue was a proposal by Rep. Anna Paulina Luna (R-Fla.) that would allow new parents to vote by proxy for a short period. 

Luna forced a vote on the proposal using a discharge petition, a procedure that rarely gains enough support to bring legislation opposed by House Leadership to the floor. Speaker Johnson attempted to scuttle Luna’s proposal by including a measure squashing it into the rules package that would have teed up the rest of the week’s legislative agenda. 

The resolution is expected to pass eventually, although how the proxy voting measure gets resolved is yet unknown.