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Republicans have a key tool for legislative action over the next few months, known as the Congressional Review Act (CRA). As the Prospect has written, any significant agency rule or regulation finalized within the last 60 congressional working days of the previous term (dating back to August 16 of last year) can be challenged with a resolution of disapproval and overturned by Congress with a majority vote in each chamber, avoiding the Senate filibuster. This gives anti-regulatory conservatives a chance to reverse important protections for the public on behalf of industry; Donald Trump signed 16 CRA resolutions in his first term.
As of January 29, Senate and House Republicans have drafted 12 resolutions of disapproval. Here’s a snapshot of what Republicans want to get rid of: Environmental Protection Agency (EPA) drinking water regulations; another EPA rule that phases out a potent form of greenhouse gases; and a Department of Homeland Security rule that modernizes the H-1B visa program.
Though the overturning of these rules has the potential to be harmful, one agency’s output hasn’t yet been put up for reversal: the Consumer Financial Protection Bureau (CFPB). Two CFPB rules that are in Republican sights will have a direct impact on the financial lives of everyday Americans, protecting consumers from corporate greed.
The CFPB issued four major rules after the August 16 deadline: a cap on banking overdraft fees; a ban on the inclusion of medical debt on credit reports; a rule that heightens scrutiny on non-banks with digital payment platforms; and a rule that makes it easier for consumers to access their financial data.
The cap on overdraft fees and the elimination of medical debt from credit reports are the two most likely to be challenged in Congress. The two rules were put forth by CFPB director Rohit Chopra, whom Donald Trump miraculously hasn’t fired yet, much to the chagrin of Wall Street. Both regulations rein in the power of banks to use people’s poverty against them, and are extremely popular among consumers.
What’s more, both rules went through a thorough review process and have been worked on for 12 and 4 years, respectively. They’ve both received tens of thousands of public comments, and gone through extensive cost-benefit analyses, two rounds of Regulatory Flexibility Act analysis, and, for the medical debt rule, a small-business advocacy review panel.
Sounds pretty good, right? Not to Republicans. As James Goodwin of the Center for Progressive Reform told the Prospect, “The point of the Congressional Review Act is to take what is best about the administrative state—rational decision-making, deliberation, public engagement, policy analysis, all those things—and replace it with what is worst about Congress.” Resolutions of disapproval through the CRA do not need to go through committees, and are limited to just ten hours of debate in the Senate. “The point of the Congressional Review Act is to defeat deliberation,” Goodwin said.
Caps on Overdraft Fees
The rule capping overdraft fees ties up a long-standing loophole in the 1969 Truth in Lending Act, which requires lenders to disclose information about all charges and fees associated with a loan. The act has an exception written in for overdraft fees, which at the time were only used occasionally to protect checks from bouncing. As the decades passed and banking became automated and online, banks started to exploit the loophole, charging high fees for overdrawing your bank account and not always disclosing them.
The CFPB’s new rule places a $5 cap on overdraft fees, which it estimates will save households $5 billion annually. Before the regulation was finalized, many banks charged $35 per overdraft transaction, generating billions of dollars in profits every year. Some banks would set overdraft limits in advance without clearly informing their customers, and calibrated their fee systems with the explicit goal of generating fee revenue. By increasing transparency, the rule will also hopefully protect against exploitative banking practices aimed at increasing fees. Banks have been known to charge overdraft fees even when the account is funded, or manipulate the order of transactions to increase charges, policies that are explicitly aimed to extract as much money from consumers as possible.
Because of Chopra’s advocacy on the subject, many big banks have limited or eliminated overdraft fees. But a substantial number of banks still impose these charges, and want Congress to kill the rule.
Households that pay overdraft fees spend an average of $225 on them annually, Americans for Financial Reform says. That sum can keep people wary of the banking system or push them out of it, forcing them to become unbanked. The data shows that access to banking is a racial justice issue: 10.6 percent of Black households are unbanked, compared to just 1.9 percent of white households.
Elimination of Medical Debt From Credit Reports
The other CFPB rule that Republicans are itching to overturn is the elimination of medical debt from credit reports, which was finalized earlier this month. Medical debts, often unpredictable, involuntary, and exorbitant, are not accurate predictors of one’s likelihood to pay off other loans, the CFPB found. Instead, unpaid medical debt unnecessarily weighs down consumers’ credit scores, harming their ability to access lines of credit. And many instances of medical debt are erroneous, counting debt that was not incurred or already paid. The CFPB found that people who had their medical debt wiped from their credit reports experienced a credit score increase of 20 points on average, enough of an increase in some cases to elevate them into a higher credit score tier.
As with most things in American life, medical debt does not impact everyone equally. Black and Latino households are more likely to carry medical debt than white households. Adults with a disability are twice as likely to have medical debt than non-disabled adults. The rule prohibits credit reporting companies (like TransUnion and Equifax) from sharing medical debt information with lenders, giving those with medical debt a chance to get fair loans.
The Coming Republican Attack on the CFPB’s Rules
Polling confirms what anyone could guess: Americans across the board support policies that protect them from financial greed. Nine in ten voters agreed that regulating financial services and products to ensure that they are fair to consumers is important, while 84 percent of voters who read information about overdraft fees supported limiting them.
Still, Republicans are actively gearing up to overturn these popular and effective rules.
Goodwin suggests that there are two main reasons for this. First, Republicans have a vendetta against the CFPB. “Anything that the CFPB does is just almost inherently illegitimate in their eyes,” he said.
Second, Republicans are in the pockets of the banking industry, and will do whatever it takes to help their profit margins. Eight years ago, Goodwin did a survey of resolutions of disapproval put forth by Republicans and found that the sponsors of those resolutions almost always received significant funding from the industry affected by the rule they wanted to overturn. “This certainly has the appearance, if not the reality, of corruption,” Goodwin said.
A spokesperson for Senate Banking Committee chair Sen. Tim Scott (R-SC) told Politico that “Chairman Scott is in close contact with [House Financial Services] Chairman [French] Hill to ensure both committees are prioritizing overturning the Biden administration’s rules that will do the most harm to consumers.” Their logic? According to the Scott spokesperson, getting rid of the CFPB regulations will “protect Americans’ access to credit and important financial services.” In other words, slashing the rules will keep banks and lenders happy enough to continue providing services. Consumers must be harmed if they want to get access at all.
Goodwin notes that, despite the Republican majority in Congress, there’s a chance of protecting the rules from the CRA. While resolutions of disapproval on CFPB rules are almost certain to make it through the Senate, there’s a chance that enough moderate House Republicans can be persuaded to vote against them. Right now, Republicans have only a one-vote majority in the House, and there is a deadline to enact CRA rules from the previous administration of May 12, 2025.
Unanimity among Democrats would also need to be maintained, which isn’t a guarantee when “more than a few Democrats feel overly beholden to the banks,” Goodwin said. But these rules are worth a fight.
“It is possible to win, particularly on rules like these, where the public sympathy for what they do is so clear and so easy to explain,” he said. “I mean, this is Disney villain type stuff.”
