- Vivek Ramaswamy further reinforced DOGE's demand for the abolition of the Consumer Financial Protection Bureau.
- He wrote to X that the CFPB overstepped its authority with recent rules limiting overdraft fees.
- The CFPB's rules aim to cap, rather than eliminate, bank overdraft fees, saving consumers billions of dollars.
Vivek Ramaswamy points to the agency's latest rules providing banking relief to Americans as an example of why the agency should be abolished.
Ramaswamy was chosen by Donald Trump to join Elon Musk in recommending spending cuts in the new Department of Government Efficiency. Posted The Consumer Financial Protection Bureau overstepped its authority with a recent rule limiting overdraft fees, it was announced in Thursday's X.
“A new administration can and should reverse this overreach, but we must go further. This latest move by the CFPB is an attempt by unelected bureaucrats to subvert their policy decisions to those of Congress. It is merely a symptom of a much more serious (and unconstitutional) cancer caused by the substitution of . “It’s un-American and it needs to stop.”
DOGE is an advisory committee that does not have the power to eliminate government agencies or cut spending on its own, but it is in a position to make recommendations. Now, both leaders say the Trump administration should “eliminate the CFPB,” as Musk said in November.
Ramaswamy's post referenced a rule finalized by the CFPB on Dec. 12 that limits banks on overdraft fees (the amount charged when a customer attempts to spend over their balance). It is mandatory to do so. The agency estimated that the new rules could save Americans up to $5 billion a year, or $225 per household.
“The CFPB is hearing from tens of thousands of Americans who are tired of paying billions of dollars in junk fees,” CFPB spokeswoman Alison Price told Business Insider in a statement. “While this rule is common sense and long overdue, it is unclear why major banks are afraid to be transparent with their customers about the interest rates they charge on overdraft loans.”
The rule updates federal regulations for banks with more than $10 billion in assets, including major institutions such as Bank of America and Capitol One. Banks currently have two options to choose from to deal with overdraft fees. You can cap the fee at $5 or set the fee to the amount needed to cover the bank's costs and losses. Banks that profit from overdraft fees will also be required to disclose the terms of their fees, just as they already do with credit cards and other types of loans.
CFPB took action It filed a lawsuit against Wells Fargo in 2022 after the agency announced it had 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 prohibit excessive hidden fees.
The CFPB is no stranger to criticism. In May, the Supreme Court 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, rather than the agency receiving the funds. Forever. Since its creation in 2011 after the financial crisis, the CFPB has received funding directly from the Federal Reserve, allowing it to carry out its functions independently of the political spending process.
Mr. Trump, Mr. Musk and Mr. Ramaswamy have called for the abolishment of other federal agencies, including the Department of Education, the Internal Revenue Service, and the Environmental Protection Agency.
It is unclear whether DOGE's efforts to eliminate agencies like the CFPB will be successful. But CFPB Director Rohit Chopra warned Musk and Ramaswamy: interview He told MSNBC earlier this month that firing the agency would “invite a financial crisis” and would have dire consequences.
“I don't understand why people would want to commit financial crimes. If you say it's duplicity, who else would do it?” Chopra said.