- Vivek Ramaswamy doubled down on DOGE’s calls to eliminate the Consumer Financial Protection Bureau.
- He wrote in X that the CFPB has overstepped its authority with its latest rule to cap overdraft fees.
- The CFPB’s rule aims to limit bank overdraft fees, not eliminate them, saving consumers billions.
Vivek Ramaswamy has invoked a government agency’s recent rule to give Americans banking relief as an example of why the office should be eliminated.
Ramaswamy, who was tapped by Donald Trump to co-head a new Department of Government Efficiency to make recommendations on spending cuts, tweeted on Thursday that the Consumer Financial Protection Bureau had overstepped its authority with the rule. its latest to limit overdraft fees.
“The new administration can and should undo this overreach, but we must go further: this latest step by the CFPB is just one symptom of a deeper (and unconstitutional) cancer of unelected bureaucrats substituting their own political judgments with those of the Congress,” Ramaswamy said. . “This is un-American and it has to stop.”
While DOGE is an advisory commission and would not have the power to eliminate agencies or cut spending on its own, it is able to make recommendations. Elon Musk, the co-head of DOGE, said in November that the Trump administration should “abolish the CFPB.”
The CFPB finalized a rule on Dec. 12 that would require banks to limit overdraft fees — the amount customers are charged when they try 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 unwanted fees,” Allison Preiss, a spokesperson for the CFPB, told Business Insider in a statement. “This rule is sensible and long overdue, and it is unclear why the big banks are afraid to be transparent with their customers about the interest rate they are charging on overdrafts.”
The rule updates federal regulations for banks with more than $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 can implement a $5 cap on fees, or they can set their fee at an amount needed to cover the bank’s costs and losses. Banks that make a profit from overdraft fees will 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 unexpected overdraft fees, resulting in customers receiving $205 million in refunds. Other federal agencies, including the Federal Trade Commission and the Department of Transportation, have also taken steps to stop hidden and excessive fees.
The CFPB is no stranger to criticism. The Supreme Court in May rejected a conservative-led lawsuit seeking to dismantle the CFPB’s funding structure. The lawsuit argued that Congress should approve annual funding for the agency instead of it receiving funding in eternity. Since its creation in 2011, following the financial crisis, the CFPB has received funding directly from the Federal Reserve, allowing it to carry out its functions regardless of the process of political appropriations.
Trump, Musk and Ramaswamy have called for the elimination of other federal agencies, including the Department of Education, the Internal Revenue Service and the Environmental Protection Agency.
It is unclear whether DOGE will succeed in its efforts to eliminate agencies like the CFPB. However, Rohit Chopra, head of the CFPB, warned Musk and Ramaswamy in an interview earlier this month with MSNBC that leaving 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 double-edged, who else is going to do it?”
