US bank overdraft fees jump 9% to four-year high, data shows

US banks collected $1.6 billion in overdraft fees during the third quarter, marking a 9.4% increase from the previous three months and the highest quarterly amount in four years, according to data calculated by Reuters. Economists have warned that this surge in overdraft fees could be an early indicator of deteriorating consumer health.

Overdrafts, consumer credit issues, and the budget cuts made by President Donald Trump to the Consumer Financial Protection Bureau (CFPB) were key concerns for Democratic candidates who secured control of both houses of Congress in the recent midterms. Overdraft fees were at their lowest point during the first quarter of 2025, when Trump took office, but they have since climbed steadily, up 23% in the three months ended September from the first full quarter of Trump's second term.

In addition to attempting to reduce the CFPB's workforce through legal channels, the Trump administration has restructured and downsized the agency's focus on industry oversight, moving away from areas like student loans, medical debt, digital payments, and consumer data. The CFPB did not respond to a request for comment. Experts believe the rise in overdraft fees may signal an early warning of an economic slowdown.

Inflation-adjusted wages have been declining since April, though car loan and credit card delinquency rates have remained relatively stable for about a year, according to Moody’s Analytics. Major banks, such as JPMorgan Chase and Wells Fargo, have seen significant increases in overdraft fees, with JPMorgan's fees climbing 32% in the third quarter and Wells Fargo's rising by 17%.

Citi ceased charging overdraft fees in 2022, while Bank of America's revenue from overdraft fees has grown by 49% since the first quarter of 2025, but remains a small fraction of the fees collected by JPMorgan or Wells Fargo. Both JPMorgan and Wells Fargo have introduced grace periods and other measures to minimize overdraft fees.

Numerous large regional banks, including First Citizens in North Carolina, are experiencing an unprecedented surge in overdraft fee revenue, with the bank reporting a 200% increase compared to the first quarter of 2025.