The Consumer Financial Protection Bureau (CFPB) has proposed a rule that could significantly reduce overdraft transaction charges. As of October 1, 2025, banks and credit unions may charge no more than $5 in fees for clients who exceed their account balance limits. This change is expected to save U.S. consumers $5 billion annually.
Under the new policy, banks will be required to only cover their actual costs and losses when addressing overdrafts, rather than charging excessive fees. Consumers with frequent overdrafts may still pay more, but the amount would be capped at $380 per year.
The CFPB’s director, Rohit Chopra, stated that the agency is cracking down on “excessive junk fees” and requiring banks to disclose interest rates for overdraft loans. However, the new policy faces a challenge from the incoming Donald Trump White House and Republican-controlled Congress, which may attempt to repeal or modify the rule.
Some financial services firms have already adopted more lenient policies, such as charging no overdraft fees or limiting fees to $50 per transaction with a 24-hour notice period. The American Bankers Association and Consumer Bankers Association have publicly opposed the CFPB’s proposed new rules, citing concerns about the impact on banks and consumers alike.
Source: https://finance.yahoo.com/news/biden-administration-cracking-down-banks-125500079.html