News & Impact Stories

House Vote Could Keep Overdraft Fees High and Deny Oversight of Payment App Fraud

March 31, 2025 — Press Release

U.S. House will consider resolutions tomorrow to overturn a $5 cap on big bank overdraft fees, eliminate oversight of Big Tech P2P payment apps

WASHINGTON – The House of Representatives is expected to vote Tuesday on resolutions to overturn two Consumer Financial Protection Bureau’s (CFPB) rules: reducing most overdraft fees from $35 to $5 and providing fraud and privacy oversight over Big Tech payment apps like Venmo, CashApp, and, soon, Elon Musk’s X Money. Both resolutions have passed the Senate on largely party-line votes, with all Democrats voting to preserve the consumer protections and just one Republican joining them, Sen. Josh Hawley (R-MO). 

With the House of Representatives closely divided, all eyes are on members in swing districts to see if they will side with corporate giants like Wells Fargo, Chase, PayPal, and X or with people facing high prices who need relief from excessive overdraft fees and protection against privacy threats and fraud.

“The resolutions target commonsense rules designed to put $5 billion back into the pockets of everyday people and protect them from fraud and privacy threats on payment apps,” said Lauren Saunders, associate director of the National Consumer Law Center. “Saddling people with big bank junk fees and curtailing fraud and privacy oversight of P2P apps punishes families already struggling to keep up with the cost of living and steer clear of fraudsters.” 

Party affiliation should not stop Representatives from protecting people from back-end junk fees and big tech. Senator Hawley’s concerns about Big Tech’s exploitation of our private data led him to vote against overturning the big tech oversight rule. He also told Politico, “I do not want to give big banks the ability to charge people outrageous sums of money,” adding that the overdraft regulation would “save the average working class household something like $265 a year.”

The CFPB’s overdraft rule, finalized in December 2024, places a $5 cap on most big bank overdraft fees, down from the typical $35 charge per transaction, while allowing more transparent overdraft lines of credit with no price limit. The Bureau estimates the rule will save the 23 million households paying overdraft fees $5 billion a year. A group of 294 consumer, labor, faith-based, and community organizations submitted a letter to Congress earlier this month urging it to close a “paper-check-era loophole” that has allowed big banks to trick people into paying excessive overdraft fees and earn billions in profits off of the most vulnerable families. 

The rule only applies to very large institutions with over $10 billion in assets. Smaller banks and credit unions are exempt. Capital One, Citibank, and Ally have completely eliminated overdraft fees while continuing to cover overdrafts.

The big tech payment oversight rule, also referred to as the “larger participant rule,” gives the CFPB the authority to examine big tech companies in the same way it supervises banks to make sure they are complying with laws that protect sensitive financial information and give people the right to dispute errors and unauthorized charges.

“Millions of people use payment apps every day, and they should be protected from the risk of losing their money and their private data,” said Carla Sanchez-Adams, senior attorney at the National Consumer Law Center. “If payment apps are going to act like banks, they should be supervised like banks, ensuring that fraud and privacy are addressed before people suffer widespread harm.”

Skyrocketing complaints to the CFPB show servicemembers, especially those stationed overseas, use payment apps frequently and are at a greater risk of being harmed.

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