House Repeals $5 Overdraft Fee Limit, Sends Bill to Trump

The House of Representatives, in a close 217-211 vote, has overturned a Biden-era rule that would have capped bank overdraft fees at $5, following similar action by the Senate. The rule, aimed at providing consumer financial protections, was set to take effect in October 2025 and was projected to save U.S. consumers nearly $5 billion annually. Republicans argued that the rule would eliminate overdraft protection, pushing consumers toward riskier lending options, while Democrats condemned the repeal as a victory for big banks at the expense of working families. House Financial Services Committee Chair French Hill criticized the rule as government overreach, whereas Democrats, led by Rep. Maxine Waters, framed the repeal as detrimental to consumer interests. Both resolutions now await President Trump's signature, who is expected to sign them into law, further limiting the CFPB's ability to regulate overdraft fees. The legislative move reflects a broader trend of diminishing consumer protections in financial regulations.