US Banks Collect $1.6 Billion in Overdraft Fees as Charges Hit Four-Year High

U.S. banks collected $1.6 billion in overdraft fees in the third quarter of 2026, the highest quarterly total in four years, as economists warned the rise could signal mounting pressure on household finances.

Revenue rose 9.4% from the previous three months, according to Reuters calculations confirmed by bank data provider KBRA Financial Intelligence. The increase comes as banks face renewed congressional scrutiny after Democrats won in this month's midterm elections.

Overdraft fees are charged when banks cover transactions that exceed a customer's available account balance. Rising revenue from those charges has drawn attention because it can reflect financial shortfalls among consumers, although the figures alone do not establish that broader credit conditions are deteriorating.

"I wonder if increasing overdrafts may be a leading indicator of developing credit problems," Mark Zandi, chief economist at Moody's Analytics, told Reuters. Inflation-adjusted wages have fallen since April, the news agency reported. However, delinquency rates on auto loans and credit cards have remained largely unchanged for about a year, according to Moody's Analytics.

The latest figures also extend a reversal in overdraft revenue after years of declines. Collections reached an all-time low in the first quarter of 2025, when President Donald Trump began his second term, according to Reuters.

Fees subsequently climbed and were 23% higher in the quarter ended September than in the first full quarter of Trump's second administration. Despite that rebound, collections remain substantially below their historical peaks.

The increase follows the repeal of a Consumer Financial Protection Bureau rule that would have capped overdraft fees at $5 per transaction. Trump signed the congressional resolution overturning the measure in May 2025, but the rule never took effect.

His administration has also sought to reduce the CFPB's workforce and scale back its oversight. Its efforts have faced court challenges, while the agency has shifted away from areas including student loans, medical debt, digital payments and consumer data.

Adam Rust, director of financial services at the Consumer Federation of America, linked the overdraft increase to changes at the bureau. The CFPB did not respond to Reuters' request for comment.

The largest banks account for a substantial share of collections. JPMorgan Chase and Wells Fargo together charged $590 million in the third quarter, approximately matching the combined total of the other banks among the 20 largest lenders.

Compared with the first quarter of 2025, JPMorgan's overdraft revenue increased 32%, while Wells Fargo's rose 17%. Both banks have introduced grace periods and other measures intended to limit charges. A JPMorgan spokesperson told Reuters that 75% of transactions involving an overdrawn account generate no fee.

Bank of America collected $55 million, up 49% from the first quarter of 2025. Its revenue remains much smaller than JPMorgan's or Wells Fargo's after it reduced its overdraft charge from $35 to $10 in 2022. Citi eliminated overdraft fees that year.

Some regional lenders posted sharper increases. First-Citizens, based in Raleigh, North Carolina, recorded a 200% rise from the first quarter of 2025, the largest increase among the 50 biggest U.S. lenders. It did not respond to Reuters' request for comment.

Democrats have pledged to examine CFPB oversight and enforcement when the new Congress convenes. Sen. Elizabeth Warren, who helped establish the bureau after the financial crisis, is expected to lead the Senate Banking Committee.

J.V. Proesel, president of bank advisory firm Moebs Services, told Reuters that some lenders anticipate another regulatory shift. He said most banks his firm advises are reluctant to introduce fees they might later have to reverse.