Nobody Is Going to Cap Your Overdraft Fee. You Can Switch It Off Yourself.

If your debit card goes through when your balance is near zero, your bank charges you a fee for the favor. BMO’s is $20 an item. Plenty of banks charge more. You can turn that off, federal law says so, it takes one phone call, and the bank has to do it.

Start there, because nobody in Washington is going to do it for you.

There was almost a cap. In 2024 the CFPB finalized a rule holding most overdraft fees at banks and credit unions over $10 billion in assets to $5, unless the institution priced the fee at its actual cost or treated the overdraft as a loan with real disclosures. The estimate was about $5 billion a year in savings, roughly $225 a year for the families who actually pay these fees.

It never took effect. The Senate voted the rule down 54 to 48 in March 2025, the House followed 217 to 211 in April, and the President signed the repeal on May 9.

Then the fees went back up.

The National Consumer Law Center pulled 2025 call report data from federal bank filings in June. Overdraft revenue at the 20 largest consumer banks was up 6.2% over 2023, to $4 billion. Huntington was up 40%. M&T was up 36%, Citizens 24%, TD 22%. Chase alone took $1.1 billion. Across all banks and credit unions, the estimate for 2025 is $12.4 billion.

The clearest illustration is BMO. It had cut its overdraft fee from $36 to $15, and its overdraft revenue fell from $27 million to $2 million. Then in 2026, with the rule dead, it raised the fee to $20 and shrank the cushion that avoids a fee from $50 down to $20.

The fee didn’t come down because it was unfair. It came down because someone was watching.

Don’t assume your credit union is the exception, either. The National Credit Union Administration stopped collecting overdraft revenue data, so you can’t look yours up anymore. The last public figure, from 2024, put Navy Federal at $28 per account per year, higher than all but one of the top 20 banks. Another credit union settled an overdraft and fee-practice suit this summer, part of a continuing wave of class actions over these fees at banks and credit unions alike.

Per-account averages run $15 to $30 at the big banks, and $94 a year at Woodforest. Averages hide how it lands, though, because the fee is charged per item and it stacks. Paying $20 or more to float a $6 debit card purchase for four days is dumb math, and it’s the most common version of this.

Do this now. Call your bank or open the app and revoke your consent to overdraft coverage on ATM withdrawals and everyday debit card purchases. You had to opt in for that in the first place. The regulation lets you revoke at any time, and says the bank must act on it “as soon as reasonably practicable.” After that, a card purchase you can’t cover gets declined at the register instead of going through with a fee attached.

Here’s the catch, and it’s real. The opt-in rule only covers debit card purchases and ATM withdrawals. Checks and automatic ACH payments aren’t covered, so rent, insurance, and utility autopay can still overdraw the account or bounce. If your rent comes out of that account, keep a cushion in it or move the autopay somewhere you watch.

If you’re paying these fees more than once or twice a year, switch instead. Capital One, Citibank, American Express, and Ally charge no overdraft fees at all. Compare what’s out there on our savings picks, and run the savings calculator to see what a small buffer earns while it sits there doing its job.

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