Bank customers who overdraw their checking accounts could soon face fees as high as $35 again after Congress used the Congressional Review Act to kill a Consumer Financial Protection Bureau rule that would have capped most overdraft charges at $5. The resolution, S.J.Res. 18, cleared both chambers and became Public Law 119-10 after presidential signature, according to the official congressional record. With the cap dead before it ever took effect, the question shifts to how quickly the largest banks will raise the fees they had already begun lowering under regulatory pressure, and whether consumers will lose the more than $6 billion in annual savings the CFPB attributed to recent overdraft reforms.
What the repeal means for the $35 overdraft charge
The CFPB finalized its overdraft rule in late 2024, targeting institutions with more than $10 billion in assets. The rule offered banks several compliance paths, including a $5 benchmark option designed to limit fees to approximate cost recovery rather than profit generation. The agency framed the measure as closing a loophole that let large banks treat overdraft charges like high-interest short-term loans without the disclosure requirements that govern other credit products.
Congress blocked the rule through the CRA before its compliance deadline arrived. Because a CRA disapproval bars an agency from issuing a substantially similar rule in the future, the repeal does not simply delay the cap. It removes the regulatory path the CFPB used, leaving no federal ceiling on overdraft fees for the foreseeable future. The agency’s own compliance page now confirms the rule never took effect.
The practical test is whether large banks will reverse the voluntary fee cuts many adopted between 2020 and 2023. CFPB data showed overdraft and nonsufficient-funds revenue had already fallen more than 50% from pre-pandemic levels by 2023, saving consumers over $6 billion a year. Some of those reductions came from competitive pressure and public scrutiny rather than regulation. But the cap’s existence gave banks a reason to keep fees low even before enforcement began. Without it, the financial incentive to restore higher charges is clear.
A reasonable expectation is that overdraft and NSF fee income at the largest banks will rebound within a few quarters, exceeding 2023 levels while still falling short of the peaks recorded around 2019. Several factors support that view: the CRA repeal removes the strongest pending constraint, bank earnings remain under margin pressure from higher funding costs, and overdraft revenue has historically been a reliable profit center for retail banking divisions. At the same time, some institutions have publicly retired overdraft fees altogether or introduced low-balance alerts and grace periods that reduce the frequency of overdrafts, making a full return to 2019 levels unlikely.
CFPB data and the regulatory record behind the fee fight
The agency’s research arm documented the scale of the fee decline before the rule was finalized. According to a 2023 “data spotlight,” overdraft and NSF revenue at banks with more than $1 billion in assets fell by more than half compared with 2019. The CFPB attributed the drop to a mix of policy changes-such as eliminating extended overdraft fees and reducing per-item charges-and to competitive shifts like the rise of checking accounts that decline transactions instead of approving them into the red.
That empirical record underpinned the bureau’s determination that high overdraft fees functioned less as a courtesy service and more as a form of high-cost credit. In the rulemaking docket, the agency pointed to patterns showing a small share of customers paying a disproportionate share of fees, often due to repeated overdrafts clustered around paydays. By reclassifying most overdraft programs at very large banks as credit, the rule would have triggered cost-of-credit disclosures and ability-to-repay assessments that do not apply under the current regime.
Industry commenters countered that overdraft is optional, that many consumers value the ability to have payments covered, and that lower fees could push banks to restrict coverage or raise other account charges. They also argued that the CFPB underestimated the operational costs of managing overdraft programs and the risk of losses when customers fail to bring accounts back to positive balances. Those arguments helped build political support for the CRA resolution, which allows Congress to nullify recent regulations by simple majorities.
How the decision fits into the broader competition agenda
The overdraft rule was one element of a wider push by the administration to strengthen household finances through competition policy. The White House has highlighted bank junk fees alongside other consumer charges-such as airline add-ons and cable termination penalties-as part of a broader effort to lower costs for families. In its public materials on competition policy, the administration has repeatedly cited overdraft reform as a way to curb what it describes as exploitative practices in concentrated markets.
With the CRA repeal now law, that strategy faces a significant setback in banking. The CFPB cannot easily revisit the same approach to overdraft fees, and any alternative rulemaking will have to navigate the “substantially similar” constraint baked into the statute. That leaves the administration relying more heavily on supervision, enforcement actions, and voluntary commitments from banks, rather than on a bright-line cap.
For consumers, the outcome is likely to be uneven. Customers at institutions that have already eliminated or sharply reduced overdraft fees may see little immediate change. Others, particularly those at large banks that previously charged $30 to $35 per overdraft, could see fees creep back toward those levels over time. The CFPB’s own data suggest that even modest increases would translate into billions of dollars in additional annual costs, borne disproportionately by account holders who live paycheck to paycheck.
In the absence of a federal cap, the front lines of overdraft policy will shift to state regulators, private litigation, and market competition. But none of those forces guarantees that the savings achieved since 2020 will endure. The repeal of the rule leaves banks with broad discretion-and leaves consumers watching their balances more closely, knowing that a single misstep could once again carry a $35 price tag.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
