Congressional Republicans pushing to repeal overdraft fee regulations

Sen. David Perdue.
(Image credit: Drew Angerer/Getty Images)

Using a fast-track process enabled by the 1996 Congressional Review Act, congressional Republicans are working to get rid of rules that keep prepaid debit card companies from charging tens of millions of dollars in overdraft fees.

In October, the Consumer Financial Protection Bureau finalized rules that include limitations on those fees. The Electronic Transactions Association, a lobbying group for the payment industry, and Total System Services, a Georgia-based financial company, have pushed hard for its repeal. NetSpend, a unit of Total System Services, is the largest manager of prepaid cards in the United States, BuzzFeed News reports. While most prepaid debit card companies do not charge overdraft fees, NetSpend does, and the company told investors last year that it made about $85 million off of overdraft fees in 2016, or 10-12 percent of its overall revenue. These prepaid debit cards are disproportionately used by low-income consumers.

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Catherine Garcia, The Week US

Catherine Garcia is night editor for TheWeek.com. Her writing and reporting has appeared in Entertainment Weekly and EW.com, The New York Times, The Book of Jezebel, and other publications. A Southern California native, Catherine is a graduate of the University of Redlands and the Columbia University Graduate School of Journalism.