- Vivek Ramaswamy doubled down on DOGE’s calls to eliminate the Consumer Financial Protection Bureau.
- He wrote on X that the CFPB overstepped its authority with its recent rule to limit overdraft fees.
- The CFPB’s rule still allows banks to charge overdraft fees, and the bureau has previously pushed back on DOGE’s claims.
Vivek Ramaswamy is pointing to a government agency’s latest rule to give Americans banking relief as an example of why the office should be eliminated.
Ramaswamy, who Donald Trump chose along with Elon Musk to make spending cut recommendations with a new Department of Government Efficiency, posted on X on Thursday that the Consumer Financial Protection Bureau has exceeded its authority with its recent rule to limit overdraft fees.
“The new administration can & should nullify this overreach, but we must go further: this latest gambit of the CFPB is just a symptom of a deeper (and unconstitutional) cancer of unelected bureaucrats substituting their policy judgments for those of Congress,” Ramaswamy said. “That’s un-American & needs to end.”
While DOGE is an advisory commission and does not have the power to eliminate agencies or cut spending on its own, it is in the position to make recommendations. Now both leaders have said the Trump administration should “delete CFPB,” as Musk said in November.
Ramaswamy’s post refers to a rule the CFPB finalized on December 12 that would require banks to limit overdraft fees — the amount charged to customers when they attempt to spend more than their balance. The agency estimated that the new rule would save Americans up to $5 billion each year, or $225 per household.
“The CFPB has heard from tens of thousands of Americans who are sick and tired of paying billions in junk fees,” Allison Preiss, a CFPB spokesperson, told Business Insider in a statement. “This rule is common sense and long overdue, and it’s unclear why big banks are scared to be transparent with their customers about the interest rate they’re charging on overdraft loans.”
The rule updates federal regulations for banks with over $10 billion in assets, including major institutions like Bank of America and Capitol One. Banks can now choose between two options to address overdraft fees: They could implement a $5 cap on fees, or they could set their fee at an amount necessary to cover the bank’s costs and losses. Banks earning profits off of overdraft fees would also be required to disclose the terms of the fees, as they already do with credit cards and other types of loans.
The CFPB took action against Wells Fargo in 2022 after the bureau said it charged consumers surprise overdraft fees, which resulted in $205 million in refunds to impacted consumers. Other federal agencies, including the Federal Trade Commission and the Department of Transportation, have also taken steps to ban hidden and excessive fees.
The CFPB is no stranger to criticism. The Supreme Court in May rejected a conservative-led lawsuit that sought to dismantle the CFPB’s funding structure. The lawsuit argued that Congress should have to approve annual funding for the agency rather than it receiving funding in perpetuity. Since its creation in 2011 in the wake of the financial crisis, the CFPB has received funds directly from the Federal Reserve, allowing it to carry out its functions independently of the political appropriations process.
Along with the CFPB, Trump, Musk, and Ramaswamy have called for eliminating other federal agencies including the Education Department, the Internal Revenue Service, and the Environmental Protection Agency.
It’s unclear how far DOGE will succeed in its efforts to eliminate agencies like the CFPB. However, Rohit Chopra, the head of the CFPB, warned Musk and Ramaswamy in an interview earlier this month with MSNBC that axing the agency is “begging for a financial crisis” and would have dire consequences.
“I don’t understand why people would want financial crime,” Chopra said, “and if they say it’s duplicative, who else will do it?”
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