Attorney General Ellison seeks to protect consumers from high overdraft fees
AG Ellison and 22 attorneys general urge House to reject resolution overturning CFPB’s rule limiting overdraft fee charges by big banks
Overturning CFPB rule faced bipartisan opposition in the Senate
April 10, 2025 (SAINT PAUL) — Attorney General Ellison and a coalition of 22 other attorneys general sent a letter to the leadership of the U.S. House of Representatives and the House Financial Services Committee urging the House to vote against a resolution that would overturn the Consumer Financial Protection Bureau’s (CFPB) 2024 rule limiting overdraft fees imposed by the country’s largest banks. The rule prevents big banks from charging excessive overdraft fees that can hurt their customers’ credit and sometimes lead to account closures.
"My mission is to help people afford their lives, which is why I'm fighting to protect Minnesotans from excessive overdraft fees," said Attorney General Ellison. "All too often, people getting charged high overdraft fees are those who can least afford to pay them. Limiting these excessive fees is a common-sense rule that puts money back in the pockets of working folks. Today, I am calling on the House of Representatives to do the bidding of the people they serve, not the big banks."
House Joint Resolution 59 would overturn a 2024 rule issued by the CFPB that applies only to banks with over $10 billion in assets. The rule imposes reasonable limits on the overdraft fees these big banks may charge when customers overdraw their accounts. Nevertheless, late last month, the Senate narrowly passed its version of the resolution overturning the CFPB’s rule by a vote of 52-48, with Republican Senator Josh Hawley joining Senate Democrats to vote against it.
The average overdraft fee imposed by banks is about $35 and is usually significantly larger than the overdraft itself. Overdraft fees are also a major profit center for banks, accounting for about $5.8 billion in revenue in 2023. As Attorney General Ellison and the coalition state in their letter, under the CFPB’s rule, if banks intend to continue profiting from such fees, they must treat them as interest on a loan, which is what they effectively are. Given that most overdraft fees are paid back in less than three days, a typical fee of $35 on an average overdraft of $26 is the equivalent of an annual interest rate of 16,000 percent.
As Attorney General Ellison and the coalition argue in the letter, the CFPB’s rule plays a valuable role in protecting bank customers from excessive and often unexpected charges that can sometimes lead to involuntary account closures, damaging customers’ credit and even driving them out of the banking system altogether. In addition, excessive overdraft fees are unnecessary. As Attorney General Ellison and the coalition point out in the letter, many banks – including Citigroup, Capital One, and Ally Bank – have already eliminated overdraft fees while still providing the convenience of overdraft protection.
Attorney General Ellison has spent years fighting to ensure overdraft fees are fair and transparent. In May of 2012, when he served in Congress, then-Representative Ellison co-sponsored legislation (H.R. 5691) to amend the Truth in Lending Act to require banks to clearly disclose overdraft coverage fees. The bill also allowed consumers not to opt into overdraft protections. Instead, if there were insufficient funds in their account to cover a given transaction, the transaction would be declined and no fees would be charged. Additionally, the bill prohibited banks from offering worse terms to consumers who opted out of overdraft protections.
Joining Attorney General Ellison in sending this letter are the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont, Washington, Wisconsin, and the District of Columbia. The Hawaii Office of Consumer Protection also joined the coalition.
