Consumers at the largest U.S. banks face a return to roughly $35 overdraft charges after Congress nullified the Consumer Financial Protection Bureau rule that would have reined in those fees. The joint resolution, S.J.Res. 18, became Public Law No. 119-10, and the CFPB confirmed the overdraft rule now has “no force or effect.” In a separate blow to fee relief, a federal judge in Texas vacated the agency’s rule that would have set an $8 safe-harbor cap on credit card late fees for larger issuers. Together, the two developments strip away the most significant consumer-fee limits proposed during the prior administration and leave bank customers exposed to higher costs on checking accounts and credit cards alike.
How the Overdraft and Late-Fee Rollbacks Hit Consumers
The CFPB’s overdraft regulation targeted very large financial institutions and amended Regulations E and Z to treat many overdraft transactions as extensions of credit unless the fees stayed close to the bank’s actual cost of covering the shortfall. By classifying overdrafts that way, the rule would have forced big banks to either disclose overdraft charges as loan costs or cut them sharply. The Government Accountability Office classified the regulation as a major rule, published in the Federal Register at 89 FR 106768, underscoring its potential impact on fee practices at institutions with more than $10 billion in assets.
Congress used the Congressional Review Act to erase that framework. The joint resolution disapproving the rule, once signed into law as Public Law No. 119-10, barred the CFPB from issuing a substantially similar overdraft regulation without new legislation. The agency’s own compliance guidance now states that the overdraft final rule has no force or effect, while the rest of Regulations E and Z remain unchanged. That means the pre-rule status quo is restored: banks with more than $10 billion in assets can set overdraft fees at whatever level they choose, and most had been charging in the range of $35 per incident before the rule was finalized.
On the credit card side, the CFPB had finalized a separate rule setting the late-fee safe harbor at $8 for larger issuers, down from previous levels that often exceeded $30. That rule was stayed during litigation, and a Texas judge ultimately threw it out after trade groups sued, according to the Associated Press. With the vacatur, larger card issuers retain the ability to charge late fees well above $8, and no replacement cap is on the horizon. For cardholders who regularly miss due dates, the difference between an $8 ceiling and legacy fees above $30 can quickly add up to hundreds of dollars a year.
Whether Big Banks Will Raise Fees Quickly
The hypothesis that very large banks will restore overdraft fees to pre-rule levels within 90 days of the repeal becoming law rests on straightforward incentives. Overdraft and nonsufficient-funds charges have historically generated billions of dollars in annual revenue for the banking industry, and the institutions most affected by the now-dead rule are those that rely most heavily on fee income. With the regulatory threat removed, executives have a clear financial motive to reintroduce higher charges, especially if competitors move in the same direction.
Still, the path back to $35 fees is not guaranteed or uniform. Some of the largest banks had already reduced overdraft fees, eliminated nonsufficient-funds charges, or introduced small “buffer” amounts under pressure from market competition and public scrutiny. Those changes were announced before the CFPB finalized its overdraft rule and were often framed as permanent shifts in business models rather than temporary concessions. Reversing them outright could invite reputational damage and renewed political attention, even if it is now legally permissible.
Instead, banks may test more incremental strategies. One possibility is a gradual increase in fees over several statement cycles, paired with marketing that emphasizes optional overdraft protection or account tiers. Another is the introduction of new limits on the number of fee-free overdraft incidents per year, effectively raising costs for the heaviest users while allowing institutions to claim that “most customers” are unaffected. Because the rule has been nullified nationwide, there is little risk that a single institution’s move will leave it at a competitive disadvantage for long; rivals can follow suit as soon as they see that higher fees are sticking.
On credit cards, issuers face a similar calculus. The vacated late-fee rule never took effect, so card companies are not technically “raising” fees from an $8 baseline-they are simply keeping or adjusting existing schedules. That distinction may make it easier to maintain higher penalties without triggering consumer backlash. At the same time, inflation and higher interest rates give issuers cover to argue that larger late fees are necessary to deter missed payments and cover servicing costs, even though the CFPB’s analysis had concluded that prior safe-harbor levels were far above any reasonable estimate of cost.
For households, the practical implication of both rollbacks is a renewed need to monitor account terms and due dates closely. Without federal caps in place for the largest banks and card issuers, fees can vary widely from one institution to the next, and changes may be buried in updated disclosures. Consumers who frequently overdraw accounts or pay credit card bills late may want to seek out low-fee or no-overdraft accounts, set up automatic payments where possible, or consolidate relationships with institutions that have pledged to keep fees below legacy levels. In the absence of binding federal limits, market pressure and individual choices will do more of the work in shaping how quickly-and how far-big banks push their fees back up.
