U.S. banks opposed the rule and are expected to push hard to block it.
If your bank account regularly flirts with negative balances, or you’re just bad at keeping track of your debit card swipes, you’ve probably felt the sting of one of the banking industry’s favorite charges: overdraft fees.by the federal Consumer Financial Protection Bureau, those fees could drop sharply next year — provided the rule isn’t overturned by Congress or the courts before it goes into effect Oct. 1, 2025.
The CFPB has found that less than 10% of consumers pay nearly 80% of the fees, incurring 10 or more charges a year. Since the pandemic began in 2020, though, banks’ revenue from those fees and “non-sufficient funds” charges — incurred when a bank refuses to cover an overdraft — has dropped sharply, due in part to regulators’ scrutiny.
The bankers association was not so sanguine, saying the bureau should have held off until the Trump administration takes over. In former President Trump’s first term, his appointees at the CFPB vastly scaled back its rulemaking efforts. Nadine Chabrier, senior policy and litigation counsel at the Center for Responsible Lending, responded that banks can continue offering overdraft protection as a form of credit, but they’ll have to comply with the same rules that apply to other types. According to Chabrier, the new rule keeps pace with the change in overdraft protection as paper checks have been replaced with instant debits.
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