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4w ago

Senate Votes to Overturn $5 Cap on Bank Overdraft Fees

The resolution to nullify the CFPB rule now moves to the House, with significant implications for consumer protections and banking practices.

Sunrise behind the U.S. Capitol building as it illuminates the U.S. Flags circling the base of the Washington Monument on March 23, 2025, in Washington, DC.
Sen. Tim Scott, R-S.C., speaks during a hearing on July 11, 2024.
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Overview

  • The U.S. Senate voted 52-48 to repeal the CFPB rule capping overdraft fees at $5, with all Democrats opposing and one Republican, Josh Hawley, breaking ranks.
  • The CFPB rule, finalized in December 2024 and set to take effect in late 2025, aimed to save Americans $5 billion annually by limiting excessive fees.
  • The repeal was enacted under the Congressional Review Act, allowing Congress to nullify recent regulations with a simple majority vote.
  • Banking groups, including the American Bankers Association, supported the repeal, arguing the rule would disrupt overdraft protection and push consumers toward riskier alternatives.
  • Consumer advocates criticized the decision, warning it would increase financial strain on low-income families already struggling with inflation and high costs.