By Stephen Gandel and Douglas Gillison
NEW YORK/WASHINGTON, Nov 13 (Reuters) - US banks collected $1.6 billion in overdraft fees in the third quarter, up 9.4% from the prior three-month period and the highest quarterly amount in four years, according to Reuters calculations, which were confirmed by bank data and analytics provider KBRA Financial Intelligence.
Economists said the jump in overdraft fees could be an early warning sign of deteriorating consumer health. Also, overdrafts, consumer credit
problems and President Donald Trump's budget and staff cuts to the Consumer Financial Protection Bureau were campaign issues for Democratic candidates who won control of both houses of the US Congress in the midterm elections this month.
The fees had fallen sharply under former President Joe Biden, whose administration stressed consumer protection.
Democrats have said they plan to scrutinize CFPB oversight and enforcement. Trump, after initially vowing to abolish the CFPB, has since moved to minimize the agency but his effort has stalled in the courts.
Senator Elizabeth Warren, a Democrat who helped set up the CFPB after the 2007-2008 financial crisis, is expected to chair the Senate Banking Committee.
Fee revenue fell to an all-time low in the first quarter of 2025, when Trump took office, according to Reuters calculations. Congress then passed a resolution, signed by Trump in May, rolling back a CFPB rule that would have capped overdraft fees at $5 per transaction but never took effect.
Since then, fees have risen steadily, up 23% in the three months ended September from the first full quarter of Trump’s second term. Even with that increase, fees still are well below their all-time highs.
In addition to seeking court authorization to slash the CFPB workforce, the Trump administration has reoriented and retrenched the CFPB's industry oversight priorities. The agency has turned away from long-standing core areas of oversight like student loans, medical debt, digital payments and consumer data.
“It is impossible to separate what banks are charging in overdraft from what is going on at the CFPB,” said Adam Rust, director of financial services at the Consumer Federation of America.
The CFPB did not reply to a request for comment.
Some experts see the rise in overdraft fees as an early warning sign that the economy is weakening. Real, inflation-adjusted wages have been falling since April. Delinquency rates on car loans and credit cards have been little changed for about a year, according to Moody’s Analytics.
“I wonder if increasing overdrafts may be a leading indicator of developing credit problems,” said Moody’s Analytics chief economist Mark Zandi.
JPMorgan Chase and Wells Fargo together charged $590 million in the third quarter, roughly equal to the rest of the 20 largest banks combined. JPMorgan's increase was 32% from the first quarter of 2025 and Wells Fargo's increase was 17%. Citi eliminated overdraft fees in 2022.
At Bank of America, overdraft fee revenue has risen 49% since the first quarter of 2025, but at $55 million is a fraction of what JPMorgan or Wells Fargo collect. Bank of America cut its fee to $10 from $35 in 2022 following a CFPB report that was critical of how the big banks assessed consumers for overdrawing their accounts.
Both JPMorgan and Wells Fargo have instituted grace periods and other practices in the past few years to limit overdraft fees. A JPMorgan spokesperson said 75% of transactions in which customers overdraw their account carry no fee.
Overdraft fees are rising fastest at a number of large regional banks. At Raleigh, North Carolina-based First-Citizens, revenue from overdraft fees is up 200% versus the first quarter of 2025, the largest rise in those fees of the 50 largest US lenders. First-Citizens did not return a request for comment.
“A minority of banks are trying to get as much revenue in the door as they can, but most banks are telling us they don’t want to put fees in place that will just have to be reversed,” said J.V. Proesel, president of Moebs Services, which advises banks on account fees. “Our message to our clients is that the overdraft pendulum will swing back, whether it is 2028 or beyond. Regulators or lawmakers are going to take a look at this thing.”
(Reporting by Stephen Gandel and Douglas Gillison'; editing by Megan Davies and David Gregorio)
