Disapproving the Rule Submitted By the Bureau of Consumer Financial Protection Relating to ``Overdraft Lending: Very Large Financial Institutions''

Floor Speech

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Mr. HUIZENGA. Mr. Speaker, the Bureau's overdraft rule would implement government price controls over a product that has proven necessary for consumers to make day-to-day purchases.

Today, Congress has an opportunity to invalidate this Biden-era rule that, if implemented, would severely impact community banks and local credit unions by restricting the services they can offer, while at the same time depriving millions of Americans of an important financial safety net.

According to a 2024 survey, consumers stated that they use overdraft services because they lack credit alternatives. Taking away this backstop, which Americans say they use when in a pinch for food, utilities, and transportation, only further limits the financial options that they have available to them.

According to a New York Fed study--not exactly a conservative institution, I will tell you that--entitled, ``Who Pays the Price? Overdraft Fee Ceilings and the Unbanked,'' the New York Fed says: ``Overdraft fee caps hinder financial inclusion. When constrained by fee caps, banks reduce overdraft coverage and deposit supply, causing more returned checks and a decline in account ownership among low- income households.''

Mr. Speaker, I happen to know that because I have represented some of the poorest counties in the State of Michigan in my time in Congress. This is a valuable tool those on the lower end of the economic rung use.

After the November election and President Trump won, regulators got the message, for the most part, to stop their rulemaking and put their pens down. However, Director Rohit Chopra couldn't help himself.

This is a clear example of government knows best, and we know what this is really about. Fewer community banks and credit unions will lead to more consolidation and less options. I believe most Members here share a common goal to ensure financial inclusion, as well as financial literacy and awareness. Frankly, this rule isn't going to accomplish that. My friends on the other side of the aisle know it.

After the bank failures of 2023, community financial institutions lost consumers and remain at a disadvantage. Again, any rule that leads to greater consolidation in the banking industry only benefits the largest financial institutions in America, a class of banks regularly attacked by Members on the other side, and yet now they are trying to help them.

Although overdraft is one of the most transparent and competitive products available in depository banking, they make up about 2 percent of consumer complaints.

How have the banks responded? They have responded by proactively taking steps to promote further transparency in their overdraft products without government intervention. This includes low-balance alerts, grace periods, and other innovative tools that make sure consumers are protected from unnecessary fees.

Financial institutions in my home State of Michigan, who represent roughly 12 million customers and hundreds of billions of dollars in deposits, have shared stories of consumers who use this overdraft strategy to ensure important expenses are paid. Rent, utilities, and medical bills are ultimately paid when a shortfall exists.

Mr. Speaker, with that, I request a ``yea'' vote from my colleagues.

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