Senate Votes to Overturn Overdraft Fee Cap

The U.S. Senate has voted 52-48 to overturn a Consumer Financial Protection Bureau (CFPB) rule that aimed to limit overdraft fees to $5, a move criticized by consumer advocates as harmful to American families already facing financial strain. California Attorney General Rob Bonta condemned the decision, arguing it would increase bank fees and disproportionately affect low-income consumers and communities of color, who collectively paid an estimated $200 million in overdraft fees last year. Proponents of the repeal, including Senate Banking Committee Chairman Tim Scott, argue that the rule represented government overreach and could restrict access to necessary banking services. The reversal of this rule, which would have prevented banks from charging multiple fees on a single overdraft incident, reflects a broader political divide on consumer protection and financial regulation. The American Bankers Association supported the repeal, viewing it as essential to maintaining customer access to overdraft protection. Critics, including Americans for Financial Reform, called the vote a betrayal of working families who rely on these protections to manage unexpected expenses.