Eric Galatas, producer/reporter, Colorado News Connection, a bureau of Public News Service.
Americans with low bank balances would be on the hook for an extra $225 a year if Congress voted to roll back a new rule that would cap overdraft fees to $5. Some of these fees had been as high as $35.
The Consumer Financial Protection Bureau, the agency behind the new rule, recently lost its offices and all of its 1,700 workers. The CFPB was slammed by the Department of Government Efficiency, DOGE. It is informally run by SpaceX and Tesla CEO Elon Musk, who wants to remake the federal government under the guise of rooting out fraud and waste.
Christine Chen Zinner, senior policy counsel at Americans for Financial Reform, said the bureau is critical for protecting American consumers.
CFPB recovered billions of dollars for consumers
“This is a law enforcement agency that protects everyday people when financial institutions cheat and defraud them,” Chen Zinner explained. “In the short 14 years that it’s been around, it has already recovered $21 billion for everyday people.”
The bureau was set to regulate X, Musk’s social media site, as it rolls out financial transactions similar to PayPal and Venmo. After DOGE sent the bureau’s workers home, Musk posted on social media “CFPB RIP.”
The financial industry also disagrees with CFPB over what it called the bureau’s aggressive policing of wrongful home foreclosures and credit reports, fraudulent credit card charges, and predatory junk fees.
The agency’s fate could be decided in federal court.
Nearly 77 million people voted for Trump in the 2024 presidential election. Andrea Kuwik, policy and research director for the Bell Policy Center, said many did so in part because they were struggling to make ends meet. They believed a new administration would help bring down costs. She noted the bureau was set up precisely to protect people’s pocketbooks and savings.
“There are a lot of folks that are struggling,” Kuwik emphasized. “This entity has a proven track record of saving people money. Getting rid of that, I think, is counterproductive.”
What’s at stake
The 2008 subprime mortgage crash, which led to the Great Recession, showed what is at stake when financial institutions operate without real oversight. Zinner believes a strong and independent consumer protection agency that does not have to bend to the whims of politicians is essential.
“We simply can’t have a fair market unless there is a strong enforcement agency there to enforce those laws and protect people,” Zinner contended. “The Trump administration is now giving all sorts of financial companies a green light to defraud and gouge their customers.”
Colorado’s members of Congress could split over the issue. Senators Michael Bennett and John Hickenlooper have previously expressed support for the CFPB. However, the House delegation is more mixed. Representative Lauren Boebert and other Trump allies are expected to support the rollback of certain consumer safeguards. For example, the overdraft safeguard. Meanwhile, Representatives Jason Crow and Joe Neguse are likely to oppose it.
