Congress’s Move to Overturn Overdraft Fee Rule Would Block Relief for Families Living Paycheck to Paycheck

February 3, 2025 — Press Release

Threatened CFPB Rule Will Lower Big Bank Overdraft Fees from $35 to $5, Saving Families Billions

WASHINGTON – Late Friday, the House Financial Services Committee posted a draft resolution, to be considered at a Wednesday hearing, to overturn the Consumer Financial Protection Bureau’s (CFPB) new overdraft fee rule, which slashes most big bank overdraft fees from $35 to just $5 and will save the 23 million households who pay overdraft fees $5 billion a year. A decision to overturn the rule would cost these households an average of $225 each year. 

“Why would members of Congress side with big banks that take billions from people struggling with high prices and stop a rule that will reduce most overdraft fees from $35 to $5?,” said Lauren Saunders, associate director at the National Consumer Law Center. “Regardless of their political affiliation, voters didn’t send Representatives to Washington to enable big banks to stick it to their customers with excessive overdraft fees.”

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

“Are members of Congress going to help a corporate wrongdoer like Wells Fargo keep the $1 billion a year in overdraft fees, or will they side with ordinary people who are struggling with high prices and need those fees to go down from $35 to $5?,” Saunders asked. The CFPB previously ordered Wells Fargo to pay $3.7 billion for widespread legal violations, including creating 16 million fake accounts.

The draft resolution under the Congressional Review Act (CRA) would allow Congress, with the President’s signature, to overturn rules using expedited procedures.

While the rule reduces the $35 fees that many big banks charge now for so-called “courtesy” services, it does not cap the price on overdraft lines of credit, though banks are required to provide the same annual percentage rate (APR) pricing disclosure that credit cards provide and to give people time to repay. “Under the rule, banks would still be able to cover overdrafts,” said Carla Sanchez-Adams, senior attorney at the National Consumer Law Center. “But by seeking to overturn the rule, members of Congress will allow big banks like Wells Fargo to continue to exploit hard-working people, using high overdraft fees as a hidden profit center.”

Related Resources

• CFPB’s overdraft fee rule closes a decades-old paper-check era loophole that will put billions back into the pockets of consumers, January 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