Many Americans were filled with hope last year when government officials revealed a significant change to bank overdraft fees, capping them at $35 for checking accounts. However, with the recent shift in leadership in Washington, D.C., the future of these regulations remains uncertain.
The former President Donald Trump and Tesla CEO Elon Musk are actively seeking to minimize — if not eliminate — the regulatory powers of the Consumer Financial Protection Bureau (CFPB), the agency responsible for introducing the rule that limits overdraft fees. This political maneuvering could mean that exorbitant overdraft fees, which can impose a heavy financial strain on individuals struggling to make ends meet, might persist for the foreseeable future.
In contrast, some banks, including Citi and Capital One, have taken a progressive stance by completely abolishing overdraft fees. They have expressed to Money their unwavering commitment to maintaining these policies, regardless of potential federal changes.
On the flip side, numerous major banks have yet to provide similar relief to their customers. Institutions such as JPMorgan Chase, Wells Fargo, U.S. Bank, and PNC continue to impose overdraft fees ranging from $34 to $36, raking in hundreds of millions of dollars annually from these charges. These banks seem to be counting on the Trump administration and the Republican-controlled Congress to reverse the regulations established during the Biden administration.
Examine the Trump Administration’s Efforts to Reverse Overdraft Fee Regulations
In December, the CFPB put forth a final rule intending to eradicate “excessive” overdraft fees, set to take effect on October 1, 2025. This regulation would limit these fees, typically around $35, to a maximum of $5. Alternatively, banks could impose an overdraft charge just sufficient to cover their operational costs or losses or offer overdraft loans, provided the terms and interest rates for these credit lines were transparently disclosed.
While many consumers welcomed this regulatory change, the status of the regulation is now in jeopardy. A Congressional initiative led by Rep. French Hill (R-Ark.) and Sen. Tim Scott (R-S.C.) is pushing to repeal the CFPB rule before it becomes effective this fall.
Simultaneously, the banking sector continues to challenge this regulation through legal channels.
A representative from the Consumer Bankers Association, which advocates for retail banks, informed Money that the rule is viewed as “an illegal and harmful overreach that jeopardizes millions of Americans’ access to essential liquidity.” Banks contend that overdraft fees are crucial for their ability to allow customers to complete transactions even with negative balances, enabling access to necessities like food and utilities, albeit at a steep price.
Understanding the Implications of the CFPB Leadership Change on Overdraft Fees
CFPB Interim Director Russell Vought expressed gratitude in a post on X for the legislative efforts aimed at rolling back the Biden administration’s “midnight rule” regarding overdraft fees. He added that this repeal initiative is consistent with Trump’s broader “deregulatory agenda.”
Earlier this month, President Trump appointed Vought to lead the bureau following the dismissal of Rohit Chopra, the previous director appointed by former President Joe Biden. Under Chopra’s leadership, the CFPB had projected that the new overdraft rule could save Americans a staggering $5 billion annually.
The Trump administration appears to be in the process of determining its strategic direction for the CFPB, an agency that figures, including Musk, have suggested they wish to “delete.” Musk’s initiative, the Department of Government Efficiency (DOGE), has already resulted in the termination of numerous CFPB staff members.
As the Trump administration relaxes bank regulations and suspends CFPB activities, consumer advocates warn that it is the bank customers who will bear the brunt of these changes.
Lauren Saunders, associate director of the National Consumer Law Center, stated in a February 13 news release that “Republican leaders are prioritizing the interests of Wells Fargo and other large banks over the working families adversely affected by predatory overdraft fee practices.” The NCLC is part of a coalition that has initiated a lawsuit to counter the Trump administration’s attempts to “dismantle” the CFPB.
Currently, the fate of the overdraft regulation hangs in the balance, and there is ongoing uncertainty regarding the potential implications for overdraft fees if the rule were to be implemented. As the situation evolves, here’s what several major banks are stating about their overdraft fee policies:
Current Overdraft Fee Policies at Major Banks: A Closer Look at Wells Fargo
- Overdraft fee: $35
- Overdraft fee revenue: $937 million
In 2022, the CFPB initiated action against Wells Fargo concerning specific overdraft charges, mandating the bank to pay $205 million in restitution. Nevertheless, the bank accumulated $937 million in overdraft and non-sufficient funds fee revenue in 2023, as indicated by an April report from the CFPB. When approached by Money, a spokesperson for Wells Fargo declined to comment on any prospective changes regarding their overdraft fee structure.
JPMorgan Chase’s Stance on Overdraft Fees and Customer Charges
- Overdraft fee: $34
- Overdraft fee revenue: $1.1 billion
Customers of Chase may incur a $34 fee if their account balance is overdrawn by more than $50. The bank did not respond to Money’s inquiry regarding any potential plans to reduce this fee.
Bank of America’s Strategic Reduction of Overdraft Fees
- Overdraft fee: $10
- Overdraft fee revenue: $140 million
Bank of America made a significant move by decreasing its overdraft fee from $35 to $10 in 2022 and also eliminated its non-sufficient funds fee, which was applicable when certain transactions were denied. A spokesperson for the bank opted not to comment on future fee policies.
U.S. Bank’s Overdraft Fees: High Charges and Customer Impact
- Overdraft fee: $36
- Overdraft fee revenue: $214 million
The overdraft fee imposed by U.S. Bank is among the highest in the industry. The bank did not respond to Money’s request for information regarding any anticipated changes to this fee structure.
Citi’s Pioneering Move to Eliminate Overdraft Fees
- Overdraft fee: None
- Overdraft fee revenue: N/A
Citi emerged as the largest major bank to abolish overdraft fees in 2022. “The recent overdraft fee rule did not influence our decision,” stated spokesperson Colin Wright in an interview with Money.
PNC’s Overdraft Fee Practices and Customer Communication
- Overdraft fee: $36
- Overdraft fee revenue: $258 million
PNC charges a notably high overdraft fee but promotes the fact that customers can only incur this charge once per day. The bank did not respond to Money’s request for clarification on possible changes to its fee structure.
Capital One’s Commitment to No-Fee Overdraft Policies
- Overdraft fee: None
- Overdraft fee revenue: N/A
A representative informed Money that Capital One “proactively” chose to completely abolish overdraft and non-sufficient funds fees in 2021. They emphasized that “we will not be altering our policy regardless of the outcome of the efforts to roll back the overdraft rule. The No-Fee Overdraft initiative is central to our mission to offer top-tier, no-fee, and no-minimum products and services to our extensive customer base,” the spokesperson added.
Explore More Financial Insights from Money:
Discover the Best Banks and Credit Unions in New York for 2025
Dollar Scholar Asks: Is It Wise to Share a Bank Account With My Best Friend?
Answer These 6 Key Questions to Identify the Right Debt Payoff Strategy