The next time your checking account dips a few dollars below zero, your bank is legally free to charge you $35 for the privilege. A federal rule that would have capped that fee at $5 no longer exists.
On May 9, 2025, President Trump signed a congressional resolution that erased a Consumer Financial Protection Bureau regulation designed to slash overdraft charges at the nation’s largest banks. The CFPB had projected the rule would save consumers roughly $5 billion a year (a figure from the agency’s own analysis, not an independent estimate). Instead, the rule is now legally treated as though it was never written.
The rollback affects checking accounts at banks holding more than $10 billion in assets, a group that includes JPMorgan Chase, Bank of America, Wells Fargo, and Citibank. Together, those institutions and their peers hold an estimated 175 million accounts, according to CFPB data published alongside the final rule. For every one of those account holders, overdraft pricing will continue under the same framework that existed before the CFPB acted, with no federal dollar ceiling in place.
How Congress killed the overdraft cap
The CFPB finalized its overdraft rule in December 2024, publishing it in the Federal Register at 89 FR 106768 with an effective date of October 1, 2025. The regulation targeted only very large financial institutions and offered banks a $5 benchmark compliance option meant to replace the legacy overdraft charge that many had set at $35 or more for years.
The Government Accountability Office classified it as a major rule, which opened the door to a fast-track congressional veto under the Congressional Review Act. Senator Tim Scott introduced S.J. Res. 18 on February 13, 2025, and both chambers passed it. The president’s signature made it Public Law 119-10.
Under the CRA, a disapproved rule is not merely paused. It is erased. The $5 benchmark, the new disclosure requirements, and every other provision the CFPB built into the regulation are void. The agency is also barred from issuing a “substantially similar” replacement without fresh authorization from Congress. Since the CRA was enacted in 1996, no agency has successfully reissued a rule that Congress struck down under this process.
Which banks still charge $35 and which offer cheaper alternatives
As of June 2025, no major bank has publicly announced plans to increase overdraft charges in response to the rollback. Several of the largest institutions had already moved away from the $35 fee on their own before the CFPB rule was even finalized:
- Capital One eliminated overdraft fees entirely in early 2022.
- Bank of America cut its overdraft charge to $10 in 2022 and dropped nonsufficient-funds fees.
- JPMorgan Chase introduced grace periods and reduced the number of transactions that trigger a fee.
- Wells Fargo still lists a $35 overdraft fee in its account disclosures, though it added a 24-hour grace period for customers to cover shortfalls before the charge posts.
- U.S. Bank and PNC both reduced or restructured their overdraft programs in 2022, offering low-balance alerts and small-dollar cushions before fees kick in.
Those voluntary changes came under competitive pressure and public scrutiny, not because of a regulation that had not yet taken effect. The question now is whether those reductions survive once the regulatory threat behind them has been removed.
Banks are not required to maintain lower fees, and overdraft revenue has historically been a major income stream. According to CFPB research reports, large banks collected more than $9 billion in overdraft and nonsufficient-funds fees in 2019 alone. That figure dropped sharply during the pandemic and the subsequent wave of voluntary fee cuts. But without updated earnings disclosures covering the period after May 2025, there is no hard data yet showing whether overdraft income at major banks will rebound, hold steady, or keep declining.
What the CFPB can still do
The CRA’s “substantially similar” prohibition is a powerful constraint, but it does not strip the bureau of all authority. The CFPB retains the power to enforce general prohibitions against unfair, deceptive, or abusive acts and practices, which could theoretically be applied to the most egregious overdraft schemes on a case-by-case basis.
A broad, industry-wide fee cap like the one Congress just voided, however, would almost certainly require new legislation. As of June 2025, there is no indication that such a bill has meaningful support in either chamber. The agency’s leadership under the current administration has also shown little appetite for aggressive rulemaking on bank fees.
Why state-level action faces steep hurdles
Some states have historically layered their own consumer-protection standards on top of federal banking rules. New York, California, and Illinois all have active financial-regulation agencies with the authority to impose state-level requirements on banks operating within their borders.
So far, though, there is no publicly available record of new state legislation or regulatory action specifically targeting overdraft fees in response to the federal rollback. Any state-level effort would also face a significant legal hurdle: nationally chartered banks can sometimes preempt state fee regulations under federal banking law, limiting how far a state can go even if it wants to act.
How to protect yourself before October
For the roughly 23 million U.S. households that the CFPB has identified as frequent overdraft users, the practical reality is blunt: the fee protections that were supposed to arrive on October 1, 2025, are not coming, and there is no replacement on the horizon.
One thing many account holders do not realize is that they have a choice. Under the Federal Reserve’s Regulation E, banks must get your consent before enrolling you in overdraft coverage for debit card and ATM transactions. If you never opted in, or if you call your bank and opt out, those transactions will simply be declined at the point of sale rather than approved and hit with a fee. This does not cover checks or recurring electronic payments, but it eliminates the most common source of surprise overdraft charges.
Beyond opting out, it is worth reviewing your account terms now. Some banks offer low-cost overdraft options, grace periods that give you until the end of the next business day to cover a shortfall, or linked-account transfers that pull from savings instead of triggering a fee. Others have kept legacy pricing structures that allow charges of $35 per transaction, sometimes multiple times in a single day. The difference between those two approaches can amount to hundreds of dollars a year for a household that occasionally dips below zero.
Where overdraft pricing power sits after the rollback
The broader policy fight over overdraft fees is far from settled, but the most direct federal attempt to cap them has been permanently shelved. Until Congress revisits the issue or banks face renewed competitive pressure to lower fees on their own, the pricing power sits with the institutions, not the regulators, and the burden of avoiding those charges falls squarely on the account holder.
