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junk fees
Trump CFPB Accused of Siding With 'Bottom-Feeder' Payday Lenders Over Struggling Workers
"A policy of 'hear no evil, see no evil, punish no evil' is a sure-fire way to promote lawless behavior," said one advocate.
Mar 31, 2025
"Regulatory relief for small loan providers" was how the Trump administration described its decision not to prioritize enforcing a rule meant to protect people who are financially struggling from predatory payday lenders—but one consumer protection advocate said Monday that the announcement signals a policy that that is certain to "promote lawless behavior" by corporations.
The Consumer Financial Protection Bureau (CFPB), whose actions aimed at protecting working families and consumers from big banks and other corporations have been attacked for years by Republicans, announced last Friday that under the Trump administration, it will not enforce a rule meant to safeguard people from fees they accrue when payday lenders repeatedly attempt to debit their accounts.
Part of the 2017 payday loan rule, the bounced payment rule was set to go into effect on Sunday—barring payday lenders, "buy now, pay later" (BNPL) lending services, and other predatory lenders from continuing to make attempts to debit bank accounts after a loan customer's payment bounced twice. The lenders would be required under the rule to gain the customer's permission after two failed attempts to retrieve the payment.
When the CFPB announced last year that the rule was set to go into effect on March 30, 2025, it noted that it had "found one instance of a lender making 11 failed withdrawal attempts in one day"—subjecting the consumer to "a pile of junk fees" including nonsufficient (NSF) funds fees, overdraft charges, and others.
Adam Rust, director of financial services for the Consumer Federation of America, said Monday that the CFPB had "sided with bottom-feeder payday lenders at the expense of vulnerable borrowers struggling to make ends meet."
"The CFPB is designed to be a law enforcement agency," said Rust. "A policy of 'hear no evil, see no evil, punish no evil' is a surefire way to promote lawless behavior."
The agency said it would also not enforce rules applying to vehicle title loans, which can have high interest rates and are banned or limited in at least 30 states.
Lauren Saunders, associate director of the National Consumer Law Center, noted that former CFPB Director Kathy Kraninger, the U.S. Supreme Court, and the 5th Circuit previously upheld "the bare minimum protection against multiple NSF fees on unaffordable loans."
"It's outrageous that the CFPB will not enforce the law that prohibits payday lenders and other 200% APR lenders from continually debiting people's accounts, subjecting them to multiple NSF and overdraft fees," said Saunders. "Buy now, pay later lenders that make unaffordable loans should not be allowed to keep hitting your bank account after payments bounce twice. It's unconscionable to have greater protections for payday lenders than for people struggling to afford basic necessities."
A Pew survey in 2013 revealed that 1-in-4 payday loan customers faced an overdraft fee due to the lender's attempt to collect a payment from an account with insufficient funds.
The CFPB said it was contemplating "issuing a notice of proposed rulemaking to narrow the scope of the rule."
"By allowing payday lenders to repeatedly debit borrowers' empty bank accounts," Nadine Chabrier of the Center for Responsible Lending told Consumer Affairs, "the CFPB's political leadership is giving a free pass for payday lenders to kick people when they're down."
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Don’t Let Trump and Musk Fire the Consumer Protection Referee
As we enter a period of our history defined by billionaire oligarchs and the rule of the richest, it’s more important than ever to have agencies that stand up for everyday people, not only the ultra rich class.
Mar 07, 2025
Imagine a high-stakes football game where one team is notorious for playing dirty, skirting the rules, and making the game about brute force, not fair play. Thank goodness for the referee, right?
Well, now imagine that right in the middle of the game, the ref gets yanked off the field. Unfortunately, that’s the situation American consumers are facing now—and the other team is free to play as dirty as they please.
Since its inception in 2010, the CFPB—the Consumer Finance Protection Bureau—has been America’s indispensable referee. It’s the fast-moving, watchful eye ensuring that big banks, online lenders, and credit agencies play fair with their customers.
Musk is trying to destroy the CFPB to enrich himself—and prevent the agency from holding him accountable for how he treats X-Money users.
But the Trump administration is now trying to kick that referee off the field—permanently.
Without the CFPB, megabanks, Big Tech, and small-time fraudsters will be free to break the rules unchecked, leaving everyday consumers defenseless in the face of the fraud, abuses, and junk fees that are so prevalent in consumer finance.
With Elon Musk’s minions in the vanguard, the Trump administration has taken its slash-and-burn approach to the CFPB, determined to dismantle any government institution that stands in the way of corporate greed. Musk and Trump are defending predators, scammers, and crooks because a strong CFPB means less profit for financial companies.
The public knows the true value of the CFPB. According to a poll from Democratic and Republican pollsters, the CFPB is popular across the country—and even across party lines. Nearly 4 in 5 people say they support the agency, including 75% of Republicans and 86% of Democrats.
The agency’s popularity is no coincidence. It’s been earned through relentless dedication to standing up for people.
Since 2010, the CFPB has won more than $21 billion in restitution and cancelled debts to consumers who were scammed by financial institutions. The CFPB has also created safeguards against future financial crises, especially in housing, and cracked down on all manner of junk fees.
Congress established the CFPB as an independent agency to protect consumers from predatory financial practices. Now we have to defend the CFPB from political sabotage. In addition to Trump’s attacks, industry-friendly lawmakers are working to weaken the CFPB, threatening its ability to keep an eye on powerful financial actors.
Congress must reject these attacks and ensure the CFPB remains ready to do the job it has done so well. That includes defending the CFPB’s independence, funding, and integrity—as well as resisting attempts to roll back existing safeguards.
A CFPB measure to limit bank overdraft fees to $5, down from the typical $35 per transaction, would save 23 million households $5 billion annually. But that rule is now on the congressional chopping block. Additionally, Congress must protect CFPB’s measure to keep medical debt off the credit reports of the 15 million Americans burdened by unexpected medical expenses.
Before the Trump administration arrived, the CFPB also created protections for the millions of users of digital payment apps and wallets to prevent fraud, safeguard people’s sensitive personal information, and prevent Big Tech and other firms from freezing or deactivating accounts without notice or explanation.
Notably, this rule would apply to the partnership between Visa and X, Elon Musk’s social network formerly known as Twitter. Now, Musk is trying to destroy the CFPB to enrich himself—and prevent the agency from holding him accountable for how he treats X-Money users.
As we enter a period of our history defined by billionaire oligarchs and the rule of the richest, it’s more important than ever to have agencies that stand up for everyday people, not only the ultra rich class. People deserve a tough, honest referee in Washington that can stand up to Wall Street and other financial predators.
If the CFPB can’t blow the whistle, there’s no doubt they will play dirty.
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As Musk Attacks CFPB, GOP Lawmakers Take Aim at Overdraft Rule—A Gift to Wall Street
"This is just the latest broken promise from Republicans, who have used their short time in power to already cater to special interests over hardworking Americans," said one watchdog leader.
Feb 18, 2025
A U.S. watchdog group on Tuesday slammed Republicans in Congress for trying to kill the Consumer Financial Protection Bureau's overdraft rule as U.S. President Donald Trump and billionaire Elon Musk target the CFPB as a whole.
The Accountable.US statement came in response to Senate Banking Committee Chair Tim Scott (R-S.C.) and House Financial Services Committee Chair French Hill (R-Ark.) recently introducing a Congressional Review Act (CRA) resolution to overturn the rule that capped most overdraft fees at $5, which was finalized in December, near the end of the former President Joe Biden's term.
"Overdraft fees affect a huge portion of American families with 17% of households with checking accounts paying overdraft or [nonsufficient funds] fees in 2023," Accountable.US noted. "This action would open the door for $35 overdraft fees—a decision that would cost American households an average of $225 each year."
The watchdog's executive director, Tony Carrk, declared that "undoing the CFPB's overdraft fee rule is a gift to big banks and a gut punch to the wallets of millions of Americans across the country."
"Deceitful and excessive overdraft fees cost Americans billions of dollars every year, but the Trump administration and Republicans in Congress don't seem to care any longer about lowering costs for Americans now that they're in charge," he continued. "This is just the latest broken promise from Republicans, who have used their short time in power to already cater to special interests over hardworking Americans."
When the Republican chairs introduced their CRA resolution last week, Scott called the Biden-era CFPB rule an example of the "pursuit of political headlines over sound policies," and Hill described it "midnight rulemaking" and "another form of government price controls that hurt consumers who deserve financial protections and greater choice."
Meanwhile, when the CFPB finalized the rule, the agency said that it "took action to close an outdated overdraft loophole that exempted overdraft loans from lending laws." At the time, the bureau was still directed by Biden appointee Rohit Chopra, who highlighted that large banks' exploitation of the loophole had "drained billions of dollars from Americans' deposit accounts."
The rule "was scheduled to become effective in October," but "because of acting Director Russ Vought's unlawful order stalling all CFPB work, the effective date has been suspended," The American Prospect reported Monday. "If Congress passes the CRA resolution, the overdraft rule could not come back in any 'substantially similar' form. So it matters if congressional Republicans decide to support allowing banks to impose additional junk fees worth billions of dollars."
The outlet also pointed out that "because CRA resolutions cannot be stopped by a filibuster, they represent some of the most likely legislative actions of the early Trump term," given Republicans' narrow majorities in Congress."
It's not just the rule that's in jeopardy; the entire agency is at risk. Trump and Musk, the leader of the president's Department of Government Efficiency (DOGE)—though perhaps not on paper—are working to gut the federal workforce and slash spending, and they have the CFPB in their crosshairs.
An agreement reached Friday in federal court halted mass firings at the CFPB and barred the bureau and its temporary leader, Vought—who also leads the Office of Management and Budget—from purging data or defunding the agency while the case moves forward. However, Trump and Musk are expected to continue their effort.
"The same billionaires trying to kill the CFPB are the ones who profit off predatory loans, sky-high fees, and financial scams that target young people," Corryn G. Freeman, executive director of the youth-focused Future Coalition, said Monday. "The CFPB should be strengthened, not eliminated. If Musk and his allies succeed in gutting this agency, it will be open season on young consumers with no one left to protect them."
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