House votes to scrap Biden-era consumer finance rules

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(Reuters) -The Republican-controlled U.S. House of Representatives on Wednesday voted to scrap two consumer finance rules adopted under former President Joe Biden that capped bank overdraft fees and gave officials the power to supervise the legal compliance of tech companies’ digital wallets and payment apps.

Since similar resolutions have already passed the U.S. Senate, they now await President Donald Trump’s signature.

The votes advance Republican efforts to enact a broad reversal of Biden-era regulations, coinciding with Trump’s wholesale moves to shrink the federal government.

The measures passed largely along party lines, with the thin Republican majority prevailing in both cases. Under federal law, if Trump signs the resolutions, the regulations will then be rescinded and the government barred from adopting similar regulations without explicit authorization from Congress.

In the Biden administration’s final weeks, the U.S. Consumer Financial Protection Bureau adopted the rules over Republican and industry groups’ objections, as they contended the agency’s actions were unjustified and exceeded its authority.

The overdraft rule would in most cases have capped such charges at $5. The so-called larger participants rule would have exposed tech companies offering payment services, like Apple Wallet, Google Pay, and others to government supervision in much the same manner as banks — something the banking sector supported by Silicon Valley strongly opposed.

According to the CFPB, banks sometimes unfairly imposed overdraft fees that helped drive corporate profits but extracted billions every year from millions of households.

(Reporting by Douglas Gillison; Editing by Aurora Ellis)