Warren says CFPB rollback raises consumer costs by $26.5 billion

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CFPB rollback consumer costs

Highlights

Warren estimates CFPB rollbacks under acting director Russell Vought will increase consumer costs by $26.5 billion, mainly through higher late and overdraft fees.
Scrapping the credit-card late fee cap at $8 adds up to $15 billion in consumer costs, while repealing the overdraft fee rule adds $7.5 billion more.
The report argues $4 billion in consumer relief is lost from the CFPB dropping over three dozen enforcement actions, as the Senate hears Vought and weighs Brian Johnson's nomination.

Fee rule reversals drive estimated losses

As first reported by CNBC, Warren says most of the estimated consumer cost comes from CFPB actions under acting director Russell Vought to roll back limits on credit-card late fees and overdraft charges.

Warren's report says scrapping a rule that would cap most credit-card late fees at $8 accounts for up to $15 billion of the total. It says repeal of the CFPB's overdraft fee rule, which would have limited many banks to charging $5 for overdrafts, adds another $7.5 billion.

The report is released as Vought faces a Senate oversight hearing on Thursday over those moves and other agency actions, including the dismissal of enforcement cases and consent orders. It also comes amid an allegation that the bureau recently removed 15 years of consumer data from its website.

Senate battle widens over CFPB direction

Since taking office last year, the Trump administration has cut staffing, dropped or narrowed dozens of enforcement cases, and rolled back Biden-era rules as it refocuses the agency on what officials describe as its core mission. Republicans defend the changes as a needed response to what they see as an overreaching regulator, while Democrats say the overhaul weakens a central consumer watchdog.

Warren, who helped create the agency after the 2008 financial crisis, says roughly $4 billion more in consumer relief is lost because the CFPB drops more than three dozen enforcement actions and settlements, some of which are set to send payments directly to consumers. The Senate is also weighing Trump's nomination of former CFPB deputy director and Capital One executive Brian Johnson to lead the bureau permanently. The White House and CFPB do not immediately respond to requests for comment.

Our earlier article covered the European Commission’s planned review of bank rules aimed at boosting EU lenders’ competitiveness through lighter capital and reporting requirements and support for cross-border consolidation. We also noted that the draft included discussion of a European Deposit and Insurance Scheme that could help unlock pan-European banking mergers as regulators look for ways to narrow the gap with larger U.S. rivals.

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