Scott, Vought warn against price controls on credit, bank products

Credit card rate caps and overdraft protection fees ultimately hurt the people they’re supposed to protect by limiting access to credit and driving consumers to unregulated entities, Senate Banking Committee Chairman Tim Scott (R.C.) and Consumer Financial Protection Bureau Acting Director Russell Vought said today.

Vought appeared before the committee on the second day of congressional hearings on the CFPB under his leadership. Republicans praised Vought for reigning in what they characterized as an out-of-control agency. Democrats argued that the acting director gutted the office to benefit businesses and hurt consumers, publishing a two and a half page report before the hearing claiming that the Trump administration’s rollback of the CFPB policy cost American consumers $26.5 billion in additional credit card late fees and overdraft fees.

“One of the tools available to (President) Trump to keep costs down is the CFPB to give money back to American families when they’ve been defrauded,” said ranking member Elizabeth Warren (D-Mass.). “Instead of helping people who were defrauded, Trump’s acting CFPB director, Mr. Vought, attacked the agency.”

Republicans instead pointed to report published earlier this year The White House Council of Economic Advisers found that the CFPB cost consumers between $237 billion and $369 billion as financial institutions were forced to pass on their increased compliance and liability costs to customers. In his opening remarks, Scott said that when price controls are in place, banks and lenders eliminate access.

“The fact is, when you limit credit cards to 10%, what you end up doing is eliminating credit options for those who have a credit score of less than 750,” Scott said. “The vast majority of Americans have a credit score of less than 750, which means they would ultimately have to go somewhere other than a bank or regulated entity to find access to credit, which means they would be at even greater risk.”

Vought was questioned about the CFPB’s decision to rescind a 2024 order requiring Navy Federal Credit Union to pay $95 million in refunds and penalties for allegedly charging “surprise” overdraft fees. He said the order was illegal and that “we want people to have protection from overdrafts.”

“If you’ve ever lived paycheck to paycheck, overdraft protection makes sure your check doesn’t bounce and you pay a worse fee because of it, and that’s often very annoying,” he said.