Senate Votes to Repeal Cap on Overdraft Fees, Threatening Consumer Protections

The U.S. Senate has approved a resolution to repeal a $5 cap on bank overdraft fees that was established by the Consumer Financial Protection Bureau (CFPB) under the Biden administration. The measure, introduced by Senator Tim Scott and passed by a 52-48 vote, has drawn criticism from Democrats and consumer advocates who argue it will disproportionately harm low-income families already struggling with inflation. Senator Elizabeth Warren condemned the repeal as a move to increase Wall Street profits at the expense of working Americans, while Senator Josh Hawley was the only Republican to oppose the measure, questioning why the party would support banks over consumers. Proponents, including Scott, claim the repeal will benefit consumers by allowing banks to cover costs, despite warnings that it will result in an estimated loss of $5 billion in annual savings for vulnerable families. The resolution is set to advance to the House for further consideration. The CFPB's original cap was intended to mitigate excessive fees that can severely impact financially vulnerable individuals.