The average overdraft fee has climbed back to about $32.75 per transaction, according to a 2026 survey cited by financial-education site Empower, nearly matching what banks charged before regulators tried to rein it in. In December 2024, the Consumer Financial Protection Bureau finalized a rule that would have capped overdraft fees at large banks at $5 unless an institution could prove a higher charge reflected its actual costs. That cap never took effect. Congress voted to kill the rule under the Congressional Review Act, and President Trump signed the repeal into law in May 2025, five months before the $5 limit was scheduled to begin.
The $5 Cap the CFPB Finalized, Then Congress Erased
The CFPB’s rule applied only to overdraft programs run by banks and credit unions with more than $10 billion in assets, the roughly 175 largest institutions in the country. Those lenders would have had to either cap overdraft fees at $5, price them to reasonable and proportional costs, or treat overdraft coverage as a loan subject to Truth in Lending Act disclosures, including an annual percentage rate. The bureau projected the rule would save households close to $5 billion a year, mostly by ending flat $30-plus fees on overdrafts of a few dollars. It was set to take effect in October 2025.
Congress used the Congressional Review Act, a statute that lets lawmakers overturn a recently finalized federal regulation with a simple majority and the president’s signature, to stop the rule before it started. The Senate voted 52-48 to repeal it on March 27, 2025, and the House followed with a 217-211 vote on April 9. President Trump signed the joint resolution on May 9, 2025, formally nullifying the CFPB’s overdraft rule.
A repeal under the Congressional Review Act carries a consequence beyond killing the single rule: the CFPB is now barred from issuing a new regulation that is “substantially similar” to the overdraft rule unless Congress explicitly authorizes it again. That leaves no regulatory path back to a federal fee cap without new legislation.
The vote broke largely along party lines. Senate Democratic leadership argued the rule targeted fees that often cost more than the overdrawn amount itself and that killing it would let charges drift back toward the levels regulators had spent years trying to bring down. Banking industry groups countered that the $5 cap would have forced some institutions to eliminate overdraft coverage entirely, cutting off a service many customers rely on to avoid a declined transaction or bounced check.
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What Overdrafters Are Paying Now That the Cap Is Gone
With no federal ceiling in place, the average overdraft fee has drifted back toward its pre-reform range. The $32.75 figure from the 2026 survey is close to the $33.58 average Bankrate measured at the market’s 2021 peak, and well above the $26.77 average Bankrate found in its 2025 checking account study, when several large banks had already begun cutting fees ahead of the CFPB rule.
Most checking accounts still carry some overdraft fee, and it typically lands as a flat charge regardless of whether the shortfall is $5 or $500. For a retiree living on a fixed Social Security deposit that arrives on the same day each month, an automatic bill payment that clears a day early can trigger the same $30-plus fee as an unplanned purchase, without the loan-style disclosures the CFPB’s now-repealed rule would have required.
The math compounds quickly. Three overdrafts in a month at roughly $33 each add up to about $99, an amount that can exceed a week of groceries for someone on a fixed income, and banks are permitted to charge the fee multiple times in a single day if several transactions overdraw the account. Because the CFPB’s rule is gone, there is no federal requirement limiting how many overdraft fees a bank charges per day or tying the fee to the size of the shortfall.
The Banks That Chose to Cut Fees Anyway
Not every bank waited for a federal mandate. Facing years of CFPB pressure over so-called junk fees, several of the largest banks eliminated or sharply reduced overdraft charges before the $5 rule was ever finalized, including institutions that dropped the fee to zero and others that cut it to the $5-to-$10 range Bankrate has tracked among banks that changed policy voluntarily.
Those cuts were business decisions, not legal requirements, and the repeal does nothing to lock them in. A bank that dropped its fee to $10 to compete for customers or avoid regulatory scrutiny is free to raise it back toward the industry average now that the CFPB’s rule is gone and no state or federal cap fills the gap it left.
The result is a fee structure now split by choice rather than law: some large banks continue to charge $5 to $10 or nothing at all on overdrafts, while others that never adjusted their pricing continue to charge close to the $33 average measured this year, with the gap determined entirely by each bank’s own competitive calculation rather than a federal floor or ceiling.
What is left unresolved is whether competition alone will hold fees down the way the CFPB’s rule was designed to. The repeal record shows lawmakers accepted that trade-off deliberately: the joint resolution barred the bureau from writing a substantially similar cap without new legislation, so any further move on overdraft pricing now depends on Congress taking the issue up again, not a regulator acting on its own.
This article was drafted with the assistance of AI tools and edited for accuracy against primary sources.
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