Bill to Overturn CFPB Overdraft Fee Rule Would Hurt Families, Allow Big Banks to Keep $5 Billion in Excessive Fees

February 13, 2025 — Press Release

Sen. Tim Scott (SC) and Rep. French Hill (AR) Introduced Resolutions to Overturn a CFPB Rule Capping Big Bank Overdraft Fees at $5

WASHINGTON –Today, House Financial Service Committee Chairman French Hill (R-AR) and Senate Banking Committee Chairman Tim Scott (R-SC) moved to repeal a measure limiting excessive junk fees imposed by big banks on people already short of funds. 

French and Scott introduced Congressional Review Act (CRA) resolutions to overturn the Consumer Financial Protection Bureau’s (CFPB) overdraft fee rule. The rule caps most big bank overdraft fees at just $5, down from the typical $35 charge per transaction. The rule would save the 23 million households who pay overdraft fees $5 billion a year. A decision to overturn it would cost these households an average of $225 each year. 

“Republican leadership is siding with Wells Fargo and other big banks over working families hurt by abusive overdraft fee practices that are huge junk fee profit centers,” said Lauren Saunders, associate director of the National Consumer Law Center. “People should let their legislators know that they need Congress to help them deal with high costs and inflation, not help rich banks get richer at their expense.” 

Banks take billions of dollars a year from the families that can least afford it but they don’t need to charge these fees at all. Capital One, Citibank and Ally have completely eliminated overdraft fees while continuing to cover overdrafts. Wells Fargo and JP Morgan Chase, however, remain the biggest offenders, each taking about $1 billion a year in overdraft and nonsufficient funds (NSF) fees.

“The overdraft fee rule is an example of how the Consumer Financial Protection Bureau stands up for ordinary people confronted by ripoffs by big banks and corporate abuses. That is why the CFPB itself is now under attack by the Administration, with Elon Musk trying to ‘delete’ the agency,” Saunders added.

The CFPB’s rule doesn’t stop big banks from covering overdrafts. It caps fees for so-called overdraft coverage at $5 or the bank’s costs. Banks can still offer overdraft lines of credit without any price cap, though they are required to provide the same annual percentage rate (APR) pricing disclosure that credit cards provide and to give people adequate time to repay. 

“A vote to overturn the CFPB’s overdraft rule takes money out of the pockets of hard-working families to boost the balance sheets at the largest banks,” said Carla Sanchez-Adams, senior attorney at the National Consumer Law Center. “Voters should demand that Congress get to work on cutting costs and reducing inflation, and stop prioritizing legislation that hurts families living paycheck to paycheck.”

Related Resources

• Overdraft Rule Returns $5 Billion in Big Bank Junk Fees to Consumers’ Pockets, Jan. 29, 2025
• CFPB Overdraft Rule Provides Real Savings for Families Living Paycheck to Paycheck, Dec. 12, 2024
• Statement Before Senate Banking Committee on Overdraft Fees and Their Effects on Working Families, May 4, 2022