Sen. Josh Hawley (R-MO) joined Senate Democrats to uphold CFPB rule capping big bank overdraft fees at $5
WASHINGTON – Today, the U.S. Senate voted 52-48 in a largely party line vote to repeal the Consumer Financial Protection Bureau’s (CFPB) rule to cap overdraft fees charged by big banks at $5, down from the typical $35. Senator Josh Hawley (R-MO) joined the Democrats in opposing the resolution. The rule is projected to save an average of $225 a year in excessive junk fees imposed by big banks on cash-strapped households, but – in a move benefiting the country’s largest banks – Sen. Tim Scott (R-SC) introduced a resolution to repeal the rule under the Congressional Review Act. Rep. French Hill’s (R-AR) companion resolution is expected to be considered in the House as soon as next week.
“Senate Republicans just voted to block real relief for families hit with high prices to pad the profits of big banks like Chase and Wells Fargo and overdraft abusers like Navy Federal Credit Union, which take billions in junk fees from families and servicemembers just trying to make ends meet,” said Lauren Saunders, associate director of the National Consumer Law Center. “It is shameful that Republicans are effectively writing bonus checks to executives at the nation’s largest banks while ordinary people struggle with high prices and increased costs of living.”
The biggest beneficiaries of overturning the rule are Wells Fargo and JP Morgan Chase, which each raked in about $1 billion in overdraft and nonsufficient funds (NSF) fees in 2024, nearly four times as much as the next biggest bank. And new National Credit Union Administration data – which is about to go dark – reveals that in 2024 Navy Fed took nearly as much as the biggest banks from its servicemember, veteran, and other customers – $725 million – despite a dramatically smaller customer base.
The CFPB’s overdraft rule, finalized in December 2024, places a $5 cap on most big bank overdraft fees, down from the typical $35 charge per transaction. The Bureau estimates the rule will save the 23 million households that pay overdraft fees $5 billion a year.
A group of 294 consumer, labor, faith-based, and community organizations submitted a letter to Congress urging it to close a “paper-check-era loophole” that has allowed big banks to trick people into paying excessive overdraft fees and earn billions in profits off of the most vulnerable families.
Under the rule, big banks would still have a variety of options to cover overdrafts, including safer, more transparent overdraft lines of credit with no price limit and the same disclosure requirements as credit cards. The rule only applies to very large institutions with over $10 billion in assets. Smaller banks and credit unions are exempt. Capital One, Citibank, and Ally have completely eliminated overdraft fees while continuing to cover overdrafts.
“The CFPB’s overdraft fee rule would put $5 billion back into the pockets of everyday people at a time when relief is desperately needed,” said Saunders. “Congress should be laser-focused on addressing high costs and inflation, not increasing profit margins at big banks on the backs of hard-working families.”
Related Resources
- Letter Opposing Resolution to Overturn CFPB Overdraft Fee, March 25, 2025
- Press Release: Court Permits Groups to Defend Overdraft Rule, March 5, 2025
- Press Release: Bill to Overturn CFPB Overdraft Fee Rule Would Hurt Families, Allow Big Banks to Keep $5 Billion in Excessive Fees, Feb. 13, 2025
- Issue Brief: Overdraft Rule Returns $5 Billion in Big Bank Junk Fees to Consumers’ Pockets, Jan. 29, 2025
- Statement Before Senate Banking Committee on Overdraft Fees and Their Effects on Working Families, May 4, 2022
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