Michigan Sens. Gary Peters and Elissa Slotkin today voted to lower overdraft fees on the state’s families, setting up a tough vote for a number of Republican lawmakers on whether to do the same in the House of Representatives.
The Republican Congress has joined the Trump administration’s attack on the Consumer Financial Protection Bureau by launching a series of efforts to roll back rules, including the one lowering overdraft fees to $5 from an average of $35. Rep. Tom Barrett is expected to be one of the critical votes to block or pass this measure when the House of Representatives takes up similar legislation in the coming weeks.
“We are deeply relieved that Sens. Peters and Slotkin put Michiganders first with today’s vote,” said Dallas Lenear, Executive Dir. & Founder, Project GREEN in Grand Rapids. ”Efforts to eliminate this rule would have deepened economic inequities, disproportionately harming communities of color and working families. By standing firm, these lawmakers chose to protect those who can least afford predatory junk fees and rising living costs. Their decision is a crucial step toward advancing economic justice, keeping hard-earned money in the pockets of those who need it most, and pushing back against policies that widen the racial wealth gap.”
The CFPB last year finalized new caps on overdraft fees at big banks, which would lower the costs from an average of $35 to $5, saving families $5 billion per year. The banking industry has long fought efforts to even disclose what banks make off overdrafts and has pushed Congress to nullify the new caps. The measure, which only applies to banks with assets above $10 billion, closes a longstanding loophole in federal rules that let banks turn these fees into a profit center by charging far in excess of what overdrafts cost the bank.
“Lawmakers who vote to roll back the CFPB’s new caps on overdraft fees are throwing their constituents under the bus for the sake of higher profits at big banks,” said Amanda Jackson, consumer campaigns director at Americans for Financial Reform. “The Senate may have spoken, but the House should reject this effort by Wall Street banks to hike overdraft fees on their constituents. Members should vote against these awful junk fees.”
Michigan advocates including PIRGMI, Community Economic Development Association of Michigan (CEDAM), Michigan Poverty Law Program, Michigan United, and Americans for Financial Reform and nearly 300 organizations from across the country wrote lawmakers opposing this attempt to repeal the CFPB overdraft rule.
