Tim Scott Slams Biden-Era Cap On Overdraft Fees, Claims It Was A Distraction From 'Bidenflation'

3/27/2025

During remarks on the Senate floor Wednesday, Sen. Tim Scott (R-SC) spoke about his legislation on overdraft fee caps.

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Transcript

00:00Senator from South Carolina.

00:02Thank you, Mr. President.

00:03Mr. President, I rise to talk in favor of my CRA on the overdraft fees.

00:09President Biden, his politically motivated junk fee conversation was not about helping consumers.

00:17It was about trying to change the conversation away from the devastation that inflation was bringing to kitchen table after kitchen table after kitchen table all across America.

00:33The average American, because of Biden inflation, lost a thousand plus dollars in spending power.

00:42Devastated by the Biden economy.

00:45President Biden looks for something to change the conversation.

00:50He changes something called junk fees.

00:53One of the junk fees he talked about was the overdraft fee.

00:57Now, some will say, what is an overdraft fee?

01:00Your bank account goes beyond zero.

01:03You have to pay a fee.

01:05Your bills are paid.

01:07Some people who live paycheck to paycheck use their overdraft option to pay their rent.

01:15So when you start capping this fee structure, you start eliminating overdraft.

01:21You start eliminating the possibility of people working paycheck to paycheck to make the decision.

01:29To make the decision to continue to use their resources in the most effective way.

01:38Unfortunately, President Biden's devastating economy has reverberated for years now.

01:48This overdraft conversation is a critically important conversation if you are like me, a guy who grew up in poverty.

01:58Single parent household who understands the difficulty, the challenge of single moms making those ends meet.

02:08I want every single hardworking American to have access to our financial system.

02:17That sometimes includes, as it did for us, free checking.

02:23A free checking account is not free.

02:27But with the revenue streams coming into the institutions, they can use those revenues as an option to provide free checking for those living paycheck to paycheck.

02:42Overturning the Biden CFPB's overdraft fee structure is good for consumers.

02:50And let me just quote from the Federal Reserve Bank of New York that confirmed the overdraft fee caps hinders financial inclusion.

03:04As a study stated, overdraft fee caps hinder financial inclusion.

03:10When constrained by fee caps, banks reduce overdraft coverage and deposit supply, causing more return checks and a decline in account ownerships among low income households.