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.
- 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.