By Justin Gray, WSB-TV
ATLANTA — The US House of Representatives has voted to repeal new protections for consumers from bank overdraft fees.
In December, the Biden administration limited overdraft fees for big banks to $5.
The Senate has already voted to toss the rule. The House voted on Wednesday along party lines, with every Republican but one voting to get rid of limits on overdrafts.
Banks and their advocates, like the Georgia Bankers Association, argue that limiting the fees would cause them to have to limit overdraft protections.
That’s something consumer advocates don’t buy.
“You’re just kind of a sucker for whatever the bank wants to do,” said Sheila Gallant. “Ridiculously pricey. It really puts you in a hole.”
“Financial institutes have to be able to generate profit from the products they offer. Otherwise, they won’t be able to offer them at all,” Montana U.S. Rep. Troy Downing said.
Georgia Watch Executive Director, Liz Coyle, does not buy that argument.
“That sounds really easy if you’re a big banker, but if you are a Georgian living paycheck to paycheck and, you know, something bounces and, all of a sudden, there’s an extra $35 or $70 out of your account, it just sets up a cycle of debt,” Coyle said.
But the CEO of the Consumer Bankers Association, which represents most major banks, said if the $5 rule was allowed to stand, some banks might end overdraft protections.
“While it sounds like, ‘Look, it might be good for them to cap these certain fees,’ what it ultimately did was going to restrict access to this service for millions of Americans,” said Lindsey Johnson with the Consumer Bankers Association.
“But guess what, it doesn’t cost them what they charge you. On average, it costs them about $5,” Coyle said.
The House also voted along party lines to overturn a CFPB rule that made it clear the agency has oversight over payment apps like Venmo, Zelle, and Cash App. That could limit government oversight of those apps.
