Consumers paid over $7.7 billion in overdraft and non-sufficient funds fees in 2022

For Immediate Release:
January 17, 2024

Olivia Goethals | 309-502-1991

ILLINOIS- Today the Consumer Financial Protection Bureau (CFPB) issued a new rule designed to significantly reduce overdraft and non-sufficient funds (NSF) fees. The new rule would close a loophole that exempts overdraft from the Truth in Lending Act and other consumer financial protection laws.

The proposed rule would require very large financial institutions to treat overdraft loans like credit cards and other loans as well as to provide clear disclosures and other protections. Many banks and credit unions already provide lines of credit tied to a checking account or debit card when the consumer overdraws. The proposal provides clear rules of the road to ensure consistency and clarity.

The proposed rule would allow financial institutions to charge a fee in line with their costs or in accordance with an established benchmark. The CFPB has proposed benchmarks of $3, $6, $7, or $14 and is seeking public comment on the appropriate amount.

Overdraft fees are notorious for disproportionately penalizing lower-income households. A recent report from the CFPB found households making less than $65K were charged an overdraft or NSF fee at a rate over three times higher than that of households making over $175K. Furthermore, overdraft fees are often a surprise to consumers; 43% of consumers charged an overdraft fee in the past year were not anticipating it.

While revenue from overdraft/NSF fees has substantially decreased in recent years, consumers still paid over $7.7 billion in overdraft/NSF fees in 2022.

“Overdraft fees should not profit off of a person’s financial misery. We applaud the banks and credit unions that are moving to eliminate or reduce overdraft fees,” said Brent Adams, Senior Vice President for Policy & Advocacy at Woodstock Institute, a Chicago-based nonprofit that works on consumer financial protection. ”In our economy, it is very expensive to be poor, and the new rule is an important step in fixing that.”

The rule would apply to financial institutions with more than $10 billion in assets, which covers approximately the 175 largest depository institutions in the country. These institutions typically charge $35 for an overdraft loan, even though the majority of consumers’ debit card overdrafts are for less than $26, and are repaid within three days.


Woodstock Institute is a leading policy and research nonprofit that advocates for consumer financial protection and community economic development. Our work seeks to combat structural inequities and to improve the quality of life in lower-income neighborhoods and communities of color. Among our areas of focus are predatory lending, access to banking, debt collection, and municipal fines and fees.