• Vivek Ramaswamy doubled down on DOGE's calls to eliminate the Consumer Financial Protection Bureau.
• He wrote on X that the CFPB overstepped its authority with its recent rule to limit overdraft fees.
• The CFPB's rule aims to cap bank overdraft fees, not eliminate them, saving consumers billions.

Vivek Ramaswamy has called out a government agency's latest 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-lead a new Department of Government Efficiency to make spending-cut recommendations, posted on X on Thursday that the Consumer Financial Protection Bureau had exceeded its authority with its recent rule to limit overdraft fees.

"The new administration can & should nullify this overreach, but we must go further: this latest gambit of the CFPB is just a symptom of a deeper (and unconstitutional) cancer of unelected bureaucrats substituting their policy judgments for those of Congress," Ramaswamy said. "That's un-American & needs to end."

While DOGE is an advisory commission and would not have the power to eliminate agencies or cut spending on its own, it is in a position to make recommendations. Elon Musk, the co-head of DOGE, said in November that the Trump administration should "delete CFPB."

The CFPB finalized a rule on December 12 that would require banks to limit overdraft fees — the amount charged to customers when they attempt 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 junk fees," Allison Preiss, a CFPB spokesperson, told Business Insider in a statement. "This rule is common sense and long overdue, and it's unclear why big banks are scared to be transparent with their customers about the interest rate they're charging on overdraft loans."

The rule updates federal regulations for banks with over $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 could implement a $5 cap on fees, or they could set their fee at an amount necessary to cover the bank's costs and losses. Banks earning profits on overdraft fees would 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 surprise overdraft fees, which resulted 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 ban hidden and excessive fees.

The CFPB is no stranger to criticism. The Supreme Court in May rejected a conservative-led lawsuit that sought to dismantle the CFPB's funding structure. The lawsuit argued that Congress should have to approve annual funding for the agency rather than it receiving funding in perpetuity. Since its creation in 2011 in the wake of the financial crisis, the CFPB has received funds directly from the Federal Reserve, allowing it to carry out its functions independently of the political appropriations process.

Trump, Musk, and Ramaswamy have called for eliminating other federal agencies including the Education Department, the Internal Revenue Service, and the Environmental Protection Agency.

It's unclear if DOGE will succeed in its efforts to eliminate agencies like the CFPB. However, Rohit Chopra, the head of the CFPB, warned Musk and Ramaswamy in an interview earlier this month with MSNBC that axing 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 duplicative, who else will do it?"

• The CFPB finalized a rule that allows banks to cap overdraft fees at $5 or set the fee at an amount that covers losses.
• The rule, which will take effect in October 2025, is projected to save Americans $5 billion annually, or $225 per household.
• The CFPB previously found that banks were charging Americans unnecessary overdraft fees.

Americans who spend more than they have in their bank accounts won't be burdened with hefty fees come October next year.

On Thursday, the Consumer Financial Protection Bureau announced that it finalized a rule that would limit overdraft fees at the bank. Overdraft fees are charged when customers make a withdrawal that results in a negative account balance. However, the CFPB found that some banks charged higher fees than they needed to cover their losses, leaving consumers in a financial bind.

The new rule updates federal regulations for banks with more than $10 billion in assets. It provides those banks with options for lowering overdraft fees, including capping them at $5. For banks that choose to offer overdraft as a service for their customers, the rule allows banks to set their fee at an amount that covers costs and losses. If banks do want to keep making profits off of overdraft fees, they'll have to disclose the terms of it like they do with credit cards and other loans.

These changes are expected to save Americans up to $5 billion each year, or $225 per household, the CFPB said.

"For far too long, the largest banks have exploited a legal loophole that has drained billions of dollars from Americans' deposit accounts," CFPB Director Rohit Chopra said in a statement. "The CFPB is cracking down on these excessive junk fees and requiring big banks to come clean about the interest rate they're charging on overdraft loans."

Lower-earning Americans are disproportionately impacted by overdraft fees, per a previous report from the CFPB. The agency found that around a third of households with income below $65,000 were charged with an overdraft or a non-sufficient fee, compared to just 10% of consumers in households earning over $175,000. Americans of color and those without a college degree were also more likely to live in households affected by those fees.

The CFPB's finalization of the overdraft rule comes as the future of the agency is unclear. President-elect Donald Trump tapped Elon Musk and Vivek Ramaswamy to lead the new Department of Government Efficiency, or DOGE, which aims to get rid of government waste. The two DOGE leaders said they would accomplish that goal, in part, by eliminating some federal agencies, including the CFPB.

"Delete CFPB," Musk wrote in a late November post on X. "There are too many duplicative regulatory agencies."

Chopra responded to Musk's remarks during an MSNBC interview on December 7, saying that getting rid of the CFPB would be "mayhem" and "begging for a financial crisis."

"I don't understand why people would want financial crime," Chopra said, "and if they say it's duplicative, who else will do it?"

Have you paid overdraft fees or struggled with banking fees? Contact these reporters at [email protected] and [email protected].