Bank overdraft fees appear to be back on the table following years of decline — and the largest banks stand to gain the most.
The Consumer Financial Protection Bureau in December moved to limit the fees banks can charge customers whose accounts dip below their available balances. The CFPB’s rule, set to go into effect later this year, would have capped overdraft fees to $5 at banks with at least $10 billion in assets.
On Friday, the US Senate voted down the rule, which the industry largely opposed. The House of Representatives is expected to vote on it next week.
“We applaud today’s Senate passage of the Congressional Review Act resolution nullifying the CFPB’s unlawful overdraft rule,” Rob Nichols, the president and CEO of the American Banking Association, said in a statement. “Without access to overdraft protection, many Americans would be driven to less regulated and higher risk nonbank lenders to cover unexpected or emergency expenses.”
Overdraft fees have been on the decline in recent years amid criticisms from the CFPB, which referred to them as “junk fees.” Banks reported $1.36 billion in such fees for the first quarter of 2024 — down from $1.41 billion during the same period the year before and the lowest in three years, according to S&P Global Market Intelligence.
In 2023, the last full year for which the data is available, consumers paid about $5.8 billion in fees for insufficient funds in their checking accounts, down from about $12 billion in 2019, according to the CFPB.
Screenshot of CFPB data
Not all banks charge overdraft fees — some firms like Charles Schwab and Capital One have ditched them altogether, according to NerdWallet. In recent years, Americans have been making using overdraft protection more infrequently, too.
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Other firms have modified how and when they levy these fees. JPMorgan Chase and TD Bank may only charge an overdraft fee under certain circumstances, NerdWallet said, such as when an account is overdrawn by more than $50.
Limited information is available about what banks earned from overdraft fees in 2024. According to the CFPB, here’s a look at what banks earned in 2023.
- JPMorgan: $1.1 billion
- Wells Fargo: $937 million
- PNC: $258 million
- Truist: $231 million
- US Bank: $214 million
- Regions: $211 million
- TD Bank: $210 million
- Bank of America: $140 million
Reed Alexander is a correspondent at Business Insider. He can be reached via email at ralexander@businessinsider.com, or SMS/the encrypted app Signal at (561) 247-5758.
