House: Vote NO on Big Tech and Overdraft Reversals

 

April 7,  2025

 

Honorable Representative
United States House of Representatives
Washington, D.C. 20510

 

Please Vote NO on:  

Overdraft Fee/ H.J. Res. 59

Big Tech Oversight/H.J. Res. 64

 

Dear Honorable Representative,

On behalf of more than 500,000 members and supporters of Public Citizen, we ask you to vote NO on both  the Congressional Review Act (CRA) H.J. Res. 59, titled “Disapproving the rule submitted by the Bureau of Consumer Financial Protection relating to Overdraft Lending: Very Large Financial Institutions;”  and the CRA H.J. Res 64, described as “Defining Larger Participants of a Market for General-Use Digital Consumer Payment Applications.”  This second CRA would repeal the CFPB’s finalized payment service user protection rule, commonly called the “larger participant rule.” Both were finalized by the Consumer Financial Protection Bureau (CFPB) and are scheduled for full House consideration presently.

 

Overdraft Fees

Overdraft fees began as a courtesy rendered by bankers to clients who naturally did not want their checks returned (bounced) because of insufficient funds in their accounts. Bankers might charge a small fee, or no fee at all, provided the client promptly restored adequate funds into the account. Because of the benign nature of this ad hoc practice, regulators did not attempt to prescribe rules under the Truth in Lending Act that would govern the level of those fees. In the 1990s, however, with payments moving from paper checks to digital transactions, including credit and debit cards, bankers began charging routinely and at higher rates for overdrafts. Bankers turned an occasional courtesy into a routine junk fee machine.  Today, total fees nationwide surpass $30 billion because many banks charge $35 for each overdraft, regardless of the size of the overdraft. In fact, the $35 fees applies on average to a $26 overdraft.

Further, some banks reorder the monthly charges to a debit card to maximize how many overdraft fees they can charge.[1]

The Consumer Financial Protection Bureau (CFPB) finalized a rule Dec. 30, 2024 to cap this charge at $5. The Bureau estimates this would save consumers roughly $5 billion annually. The rule only applies to banks with more than $10 billion in assets. The rule also provides large banks with other means of offering transparent credit terms for customers who wish to spend more than what is in their accounts.

The banking industry claims this will reduce credit available to needy customers. Instead, it will protect vulnerable consumers. Indeed, many large banks have already reduced their overdraft fees following adverse publicity.

This CRA vote represents a clear policy choice. Large banks should not profit an extra $5 billion on the backs of struggling Americans. We ask Representatives to vote NO on H.J. Res 59.

 

Big Tech Payment Platforms  

The rule merely provides oversight of Big Tech companies that offer digital payment services in the same way that the financial regulatory agencies oversee traditional banks so as to prevent fraud, unfair, deceptive or abusive acts, and safeguard sensitive personal information., The CRA resolution would insulate these Big Tech companies from such oversight, which we believe would invite unscrupulous conduct. Generally, the CFPB’s payments rule affords common sense oversight. It requires sponsors of payment services to follow federal law, and allows users to opt-out of data collection and/or sharing data with third parties. The rule reinforces consumers’ right to dispute transactions that are fraudulent or erroneous.

We are particularly concerned about Elon Musk’s effort to evade supervision of his plans to enter the payments business through his social media enterprise Twitter/X. We attach a letter that emphasizes that Musk’s history of misconduct and ongoing investigations into his various businesses should raise alarms about suspending oversight of this payment venture.

As with the overdraft fee rule, we ask Representatives to vote with average Americans who deserve supervision of Big Tech payment services. Please vote NO on H. J. Res. 64.

 

For questions, please contact Bartlett Naylor at bnaylor@citizen.org.

 

Sincerely,

 

Public Citizen

 

 

February 20, 2025

Doug Collins, Acting Director
Office of the Director
U.S. Office of Government Ethics
250 E Street SW, Suite 750
Washington, DC 20024

 

Dear Director,

I write on behalf of Public Citizen, a nonprofit consumer advocacy organization with members in all fifty states, which works to support the enactment and enforcement of laws protecting consumers, workers, and the general public. We ask you to direct Special Government Employee Elon Musk and his agents to desist from any activity, in their role on behalf of the government or the Department of Government Efficiency (DOGE), related to the Consumer Financial Protection Bureau (CFPB).  In brief, Musk intends to create a payment service associated with his social media firm Twitter/X.  Because the CFPB has authority to regulate such a project, any work by Musk and his agents at the CFPB would create a conflict of interest.

As provided in 18 USC 208, any “employee of the executive branch . . . including a special government employee,” who “participates personally and substantially ,. . . through decision, approval, disapproval, recommendation, the rendering of advice, investigation, or otherwise, . . . in which, to his knowledge, he . . . . has a financial interest shall be subject to penalties.“ Further, “Whoever willfully engages in the conduct constituting the offense shall be imprisoned for not more than five years.”

The White House designated Elon Musk as a special government employee, according to news reports, and/or “an employee in the White House office,” according to legal filings. He is therefore subject to 18 USC 208.

His efforts to render “advice” regarding the CFPB are abundant and transparent. For example, he tweeted “Delete CFPB” and “CFPB RIP.”

Meanwhile, Musk’s “financial interest” in the activities of the CFPB are similarly abundant.  Musk and his associates are slaloming through numerous government agencies where he also appears to have conflicts of interest. For the reasons described below, his actions in connection with the CFPB deserve special scrutiny.

His business decisions following his acquisition of Twitter have proven shaky, with some advertisers leaving the platform over concern with some of his public pronouncements. To right this ship, Musk has promised to turn Twitter—which he renamed X—into an “everything” product that includes a PayPal-like payment service (as well as a dating service, video platform, telephone service and more). Musk recently signed an agreement with Visa for use of Visa’s digital payment network to allow users on X to use their debit cards to make payments to their peers.

The concern that Musk’s payment system of other financial services enterprises that he might engage in will act unfairly or engage in misconduct is real, as evidenced by the fact at least nine agencies are investigating possible misconduct at three of his businesses.

Regulation of payment products such as the one envisioned by Musk falls within the CFPB’s purview. In fact, the CFPB has been “seeking public input on strengthening privacy protections and preventing harmful surveillance in digital payments, particularly those offered through large technology platforms.” Accordingly, the work at CFPB of Musk and people under him presents a direct conflict of interest.

Separately, Musk’s access to data and other information held by CFPB raises the concern that he may be privy to confidential information about potential rivals, including conventional banks and technology companies. As noted by the New York Times,  the CFPB “has opened several investigations of e-payments systems. The data collected in its investigations includes correspondence between executives, secret business plans and market analysis.”

The Office of Government Ethics “works to prevent financial conflicts of interest to help ensure government decisions are made free from personal financial bias,” according to its website. This work includes “monitoring senior leaders’ compliance with ethics commitment” and “ensuring agencies comply with ethics program requirements.” Therefore, we ask the Office of Government Ethics to ensure compliance with conflicts law by directing Musk and his DOGE associates to cease any involvement now and in the future at the CFPB.

For questions, please contact me at bnaylor@citizen.org.

Sincerely,

 

Bartlett Naylor
Public Citizen

[1] Consider a person with $400 in the account who charges, in order, $50, $60, $100, $200, and then $300. Ordinarily, the fee would only be assessed on the final charge. By re-ordering them in reverse, the bank could then assess an overdraft fee four times.