Imagine being charged $35 because you bought a $7 sandwich and didn’t realize your paycheck hadn’t cleared yet. Now imagine your elected officials voting to keep it that way… on purpose.
That’s not a bad dream. It’s what just happened in Washington.
Congress Just Killed a Rule That Would’ve Saved You Billions
On March 27, 2025, the U.S. Senate voted 52–48 to overturn a new Consumer Financial Protection Bureau (CFPB) rule that would have capped bank overdraft fees at $5 (Source)
Right now, most big banks charge $35 every time your balance dips below zero—even if it’s for just a few bucks. And they can stack those fees up to three times a day.
The CFPB rule, finalized in December 2024, would’ve required big banks (those with over $10 billion in assets) to either cap overdraft fees at $5 or prove the actual cost of processing an overdraft justified charging more. (Source)
But thanks to the Congressional Review Act, lawmakers repealed the rule—fast. (Source)
So, Who Wins?
Mega-banks.
Who loses?
You, me, and anyone who’s ever been $20 short between paychecks.
California Attorney General Rob Bonta didn’t mince words:
“Congress just voted to increase bank fees… this directly harms consumers already struggling with affordability and the ripples of inflation. Let me be clear: by allowing big banks to charge high overdraft fees, Congress is paving the way for wealthy banks to get wealthier, and for working-class people to be squeezed even further.” (Source)
In 2022, financial institutions collected over $7.7 billion in overdraft and non-sufficient funds fees.
And California consumers alone paid $200 million—with the burden falling hardest on low-income households and communities of color. (Source)
Big Banks Have Gone Full Payday
Let’s call it what it is: Legalized predation.
It used to be that payday lenders were the poster child for financial traps. But now? It’s the same trick in a business suit.
- Overdraft fees that don’t match real costs
- Fee-stacking up to three times a day
- Little to no warning before your account gets hit
That’s not banking.
That’s corporate mugging with a nice website.
Senator Tim Scott: The Face of the Repeal
Senator Tim Scott (R–S.C.) led the charge to repeal the rule, claiming it would limit consumer choice. (Source)
Let’s unpack that.
“Choice” doesn’t mean much when the only “option” is getting smacked with a $35 fee because your gas bill auto-paid a day early.
What You Can Do (When Congress Clearly Won’t Help)
You can’t stop lobbyists from doing their thing—but you can fight back smart:
- Opt out of overdraft protection. Without it, purchases get declined instead of triggering a $35 fee.
- Use credit cards over debit cards when possible—there’s more legal protection if something goes wrong.
- Track your real spending. Tools like Credit Karma help catch account dips before fees hit.
- Be skeptical of debt relief ads. Use this guide to vet companies.
- Talk to a real human, not a commissioned salesperson. I recommend Damon Day, a debt coach who works for you.
And please—don’t feel guilty about exploring bankruptcy.
📊 People who file for bankruptcy often do better financially than those who don’t (Source)
Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.
TL;DR – The System Is Working… Just Not for You
- CFPB tried to limit overdraft fees to $5
- Congress repealed the rule using the CRA
- Now banks can keep charging $35 or more
- Consumers will lose billions while banks pad profits
FAQ: What People Are Asking
Q: Was there really a rule to cap overdraft fees at $5?
Yes. The CFPB finalized a rule in December 2024 that would’ve saved consumers billions annually. (Source)
Q: Did Congress actually repeal it?
Yes. The Senate voted 52–48 to overturn it on March 27, 2025, using the Congressional Review Act. (Source)
Q: Why would they do that?
Supporters claim it would limit banking services. Critics say it gives banks a free pass to keep draining money from low-income Americans. (Source)
Q: What can I do to avoid these fees?
- Turn off overdraft “protection”
- Keep an emergency buffer, even just $50. Think about building emergency savings using the Acorns app.
- Get advice from someone who won’t upsell you
Don’t Let This Happen in the Dark
If this hit you right in the checking account, boop that like button to give this message some love and help more folks see it.
👉 Subscribe to GetOutOfDebt.org for real talk and free resources
👉 Got hit by overdraft fees? Drop a comment below—let’s talk about it.
Before you go, boop that like button, subscribe, and check out GetOutOfDebt.org for more ways to fight back.
