The House voted to reverse a rule that aimed to cap bank overdraft fees at $5, aligning with the Senate's decision to dismantle the regulation that the Biden administration believed would have saved consumers billions of dollars. The resolution passed the House 217-211 and now awaits President Donald Trump's signature. Republicans argued that the rule issued at the end of President Joe Biden's term would hinder banks from providing overdraft protection and limit access to credit for Americans. They emphasized that competition and innovation, rather than government-imposed price controls, are essential for ensuring consumers have access to affordable financial services.

Currently, the largest banks generate approximately $8 billion annually from overdraft charges with no legal cap on the fees. Banks and banking groups had previously contested the rule in court, claiming that it would push consumers towards unregulated services. Republicans used the Congressional Review Act to reverse the rule, while Democrats strongly objected, highlighting the assistance the rule would provide to consumers struggling to afford the fees. The rule, set to take effect in October, was part of Biden's initiative to reduce fees affecting consumers, particularly on everyday transactions like banking services.

The Consumer Financial Protection Bureau estimated that the rule could save consumers around $5 billion in yearly overdraft fees or $225 per household that typically incurs such charges. Democrats emphasized that these fees, as high as $35 per transaction, disproportionately impact the most financially vulnerable bank customers. They criticized the Republican move to overturn the rule, labeling it as a deliberate attack on the American public. When a bank advances funds temporarily to cover a consumer's account deficit, the consumer usually needs to repay the overdrawn amount along with an additional fee, often exceeding the initial transaction cost significantly.