House Rules hears Financial Services panel on two CRA resolutions targeting CFPB rules on overdraft fees and payment apps
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Summary
A Financial Services panel testified before the Rules Committee on S.J. Res. 18 and S.J. Res. 28, Congressional Review Act measures that would nullify recent Consumer Financial Protection Bureau rules on overdraft charges and supervision of large payment apps. Republicans framed the rules as regulatory overreach that will raise costs and limit
The Rules Committee heard testimony from the Financial Services Committee on two Congressional Review Act resolutions that would overturn Consumer Financial Protection Bureau actions.
Representative Andy Barr testified in support of S.J. Res. 18 — a resolution to disapprove the CFPB’s final rule on overdraft services — and S.J. Res. 28 — a resolution to disapprove the bureau’s larger‑participant supervision rule for certain digital consumer payment applications. Barr and other GOP witnesses described the CFPB’s rules as rushed, overly broad and likely to reduce consumer access to short-term liquidity and to stifle innovation in digital payments.
Barr said CFPB treatment of overdraft as a form of credit subject to Truth in Lending Act requirements would impose underwriting and disclosure regimes inappropriate for short-term overdraft services and could effectively remove overdraft from many community banks’ product offerings. He argued that competition, not prescriptive federal caps, achieves better consumer outcomes and noted low complaint volumes for payment apps in CFPB data.
Representative Maxine Waters, the panel’s ranking member, defended the CFPB rules as pro‑consumer. Waters said the overdraft rule does not ban overdraft services but establishes a $5 safe harbor (with exceptions when higher fees can be justified) for the largest institutions and exempts nearly all community banks and credit unions. She also said supervision of large payment-app providers is an extension of the bureau’s statutory authority to examine participants that present potential systemic consumer risk.
Committee members pressed witnesses on likely market effects, complaint volumes and whether community banks and credit unions would be insulated by the CFPB’s exemptions. Republicans said smaller institutions would nonetheless be forced to lower fees to compete; Democrats said the rules protect consumers and that claims of large-scale harm were not supported by the bureau’s targeted approach.
No committee vote on either CRA resolution was recorded at the hearing. Witnesses’ prepared statements were added to the record and committee members indicated they would press further on technical and statutory points in follow-up actions.