WASHINGTON— Sens. Elizabeth Warren (D-MA), Richard Blumenthal (D-CT) and Bernie Sanders (I-VT) have sent letters to 25 banks pressing for more information about overdraft policies they said hurt consumers, a problem they argued worsened when congressional Republicans and President Donald Trump repealed a rule capping overdraft fees at $5.
In a joint statement, the senators said they targeted banks that collect the most in total overdraft revenue, those that earn the highest share of profits from overdraft fees, and others with policies they said have harmed consumers.
‘Exploitative Mechanism’
“Overdraft and non-sufficient fund (NSF) fees are ‘one of the most common exploitative mechanisms big banks use to target the poor,’” the senators wrote.
The senators cited a Consumer Financial Protection Bureau study that found 35% of consumers with annual incomes between $35,001 and $65,000 were charged overdraft or NSF fees, compared with 18% of consumers earning between $100,000 and $175,000.
“When consumers’ finances are already stretched thin, exorbitant overdraft fees can cause other payments to bounce—leading to even more fees in a vicious circle that can ‘turn setbacks into crises,’” the senators wrote.
Loophole Left Open
They argued that the CFPB’s rule, which was repealed by Trump and Republicans in Congress, would have closed an outdated loophole exempting overdraft programs from standard credit regulation. That exemption, they said, allowed large banks “to transform overdrafts into a massive junk fee harvesting machine.”
“Had President Trump and congressional Republicans not thrown out the CFPB’s final rule, these changes would have saved consumers up to $3.5 billion in annual overdraft fees, or $225 per household that pays these fees,” the senators wrote.
They also argued overdraft fees contribute to “debanking,” with tens of millions of bank accounts closed because of fee accumulation. That outcome, they said, runs counter to Trump’s stated goal of reducing debanking (see related story iin the CU Daily).
The senators asked the banks to respond by Sept. 12, 2025.
The Recipients
The letters were sent to: JPMorgan Chase, Wells Fargo, Truist Bank, PNC Bank, U.S. Bank, TD Bank, Regions Bank, Bank of America, Huntington Bank, Fifth Third Bank, Arvest Bank, KeyBank National Association, Mechanics Bank, Dollar Bank, Northwest Bank, Community Bank N.A., BancFirst, Glacier Bank, Simmons Bank, Associated Bank N.A., Woodforest National Bank, Citizens Bank, First National Bank of Texas/First Convenience Bank, Armed Forces Bank, and Academy Bank.
