The U.S. Senate’s most consequential recent move on bank overdraft fees was repealing the federal rule that would have capped them at $5 at the country’s largest banks. In May 2025, President Trump signed S.J.Res. 18, a Congressional Review Act resolution that struck down the Consumer Financial Protection Bureau’s overdraft lending rule before it took effect.1United States Senate Committee On Banking, Housing, and Urban Affairs. President Trump Signs Chairman Scott’s Resolution Overturning Biden Overdraft Rule For customers, that means overdraft fees at most institutions remain at whatever the bank chooses to charge, which for many is still $25 to $35 per transaction.
What the Repealed CFPB Rule Would Have Done
The CFPB finalized its overdraft rule in December 2024. It targeted banks and credit unions holding more than $10 billion in assets and gave them three choices: cap the overdraft fee at $5, set a fee that only recovered actual costs and losses, or treat overdraft coverage as a loan product with full Truth in Lending disclosures.2Consumer Financial Protection Bureau. CFPB Closes Overdraft Loophole to Save Americans Billions in Fees The effective date was October 1, 2025.3Consumer Financial Protection Bureau. Overdraft Lending: Very Large Financial Institutions
Institutions under the $10 billion threshold were never covered. Community banks and smaller credit unions could have kept charging whatever their existing schedules allowed, even if the rule had survived.
How the Senate Killed the Rule
Senate Banking Committee Chairman Tim Scott introduced S.J.Res. 18 under the Congressional Review Act, the statute that lets Congress overturn recently finalized federal regulations by simple majority. The Senate passed the resolution on March 27, 2025, the House followed on April 9, and President Trump signed it on May 9, making it Public Law 119-10.1United States Senate Committee On Banking, Housing, and Urban Affairs. President Trump Signs Chairman Scott’s Resolution Overturning Biden Overdraft Rule
Two things follow from that. The $5 cap never took effect. And the CFPB is now barred from issuing a substantially similar rule without new authorization from Congress. Any future federal ceiling on overdraft fees would have to come through legislation.
What Federal Protection Still Applies
The repeal did not touch the federal opt-in requirement for overdraft coverage on ATM withdrawals and one-time debit card purchases. Under Regulation E, a bank cannot charge you an overdraft fee for covering those transactions unless you have affirmatively agreed to the service. The bank has to give you a standalone notice describing its overdraft program, a reasonable chance to opt in, and written or electronic confirmation of your consent.4eCFR. 12 CFR 1005.17 – Requirements for Overdraft Services
If you never opted in, the bank has to decline those transactions at no charge. You can revoke your consent whenever you want. The opt-in rule does not cover checks or recurring automatic payments, which the bank can still cover and charge for without your advance agreement. Many people opted in years ago when they opened the account and forgot. A five-minute call to your bank will confirm your current status.
One boundary worth naming: the CFPB rule and its repeal dealt with overdraft fees, not non-sufficient funds (NSF) fees. An NSF fee is what the bank charges when it declines the transaction rather than covering it. Both charges historically run in the same $25 to $35 range, and both are still set by the bank.5Federal Deposit Insurance Corporation. Overdraft and Account Fees
What Big Banks Are Actually Charging
Competitive and regulatory pressure starting around 2021 pushed several large banks to cut overdraft fees on their own, well before the CFPB rule was finalized. Capital One and Ally Bank eliminated overdraft fees entirely. Citibank dropped overdraft, NSF, and returned-item fees. Bank of America cut its fee from $35 to $10. Some online banks and fintechs, including Chime, offer small overdraft cushions at no charge.
Industry revenue reflected the shift. Banks collected roughly $12 billion in overdraft and NSF fees in 2019; by 2023 the figure was about $5.8 billion. The trend may be turning. With the CFPB rule gone, the regulatory pressure that drove some of those cuts has eased, and reports point to some institutions raising fees again and total overdraft revenue at the top 20 banks ticking up from recent lows.
Community banks and credit unions that never reduced their fees remain at $25 to $35 per transaction. If your bank cut or eliminated fees during the 2021–2023 window, those reductions were voluntary and can be reversed.
How to Keep Overdraft Fees Off Your Statement
The single most effective step is opting out of overdraft coverage for debit card and ATM transactions. A declined purchase costs nothing; an approved overdraft can cost $35. Beyond that, a few habits help:
- Turn on low-balance alerts. Most banks offer free text or email notifications when your balance drops below a threshold you set.
- Link a backup account. Many banks let you tie a savings account or credit card to your checking so the bank pulls from the backup instead of overdrafting. Transfer fees, where charged, are usually a fraction of the overdraft fee.
- Look at Bank On certified accounts, offered at hundreds of banks and credit unions and designed with no overdraft fees and no monthly maintenance fees.
- Ask for a waiver. Banks are not required to reverse an overdraft fee, but many will refund one or two for a customer with a clean history. If the first representative refuses, a supervisor sometimes says yes.
What the Senate Might Do Next
The Senate’s split on overdraft fees is not going anywhere. The majority that pushed the repeal argues that price caps on banking services distort the market and shrink access to short-term credit. Senators Warren, Booker, and Blumenthal, on the minority side of the Banking Committee, have continued pressing institutions directly, sending letters in 2025 to 21 credit unions6United States Senate Committee On Banking, Housing, and Urban Affairs. Warren, Booker, Blumenthal Press Twenty-One Credit Unions on Predatory Overdraft Fees Amid Trump’s Illegal Attempt to Shut Down the CFPB and 25 banks7United States Senate Committee On Banking, Housing, and Urban Affairs. Warren, Blumenthal, Sanders Press Twenty-Five Banks on Predatory Overdraft Fees As Trump Enables Them by Repealing Fee Cap demanding information on their fee practices and pointing to CFPB data showing consumers earning $35,001 to $65,000 were roughly twice as likely as those earning over $100,000 to be charged these fees.
Those letters do not carry the force of law. No new overdraft fee bill has advanced past the committee stage in the current Congress. Until that changes, the federal picture is what it was before 2024: banks set their own fees, you must opt in before being charged for debit or ATM overdrafts, and the only binding caps come from state law.