Noriega: The return of the $35 overdraft fee
Apr 10, 2025, 6:00 PM
The $35 dollar overdraft fee has returned. (Canva)
(Canva)
Editor’s note: This is an editorial piece. An editorial, like a news article, is based on fact but also shares opinions. The opinions expressed here are solely those of the author and are not associated with our newsroom.
SALT LAKE CITY — Let’s talk about the return of the $35 dollar overdraft fee. You may not have realized that it had disappeared for a season. If you missed it—I’m sure you didn’t—it’s BACK.
I wouldn’t call myself an expert in overdraft fees, but first-hand experience has taught me enough. I once purchased a soda, a cheeseburger, and some plumbing supplies in three separate transactions- probably a grand total of $20 bucks.
What I didn’t realize was that my annual MLB.TV subscription had gone through—automatic renewal—and had drained my bank account leaving me with a few pennies. The soda, cheeseburger, and toilet flange all got bitten by the overdraft dragon and I bled overdraft fees.
Three small transactions, $105 in overdraft fees—$35 bucks a pop.
I’m not looking for pity, personal responsibility plays into this. Don’t spend money that you don’t have. Don’t expect the bank to cover your overspending. That’s fair, but at what point does this conversation turn from personal responsibility to predatory behavior.
$105 smackaroos for three small purchases? Is that a personal responsibility issue or banks being exploitative? You can decide for yourself.
What stings is that it felt like we were headed in the right direction when it came to overdraft fees at banks. The Biden administration capped these fees at $5. We were taking a beautiful drive down Utah’s All-American Road—Scenic Byway 12—when Congress slammed their feet on the brake and spilled everyone’s Dirty Diet Coke all over the floorboards.
The GOP-led House of Representatives voted to overturn the Biden-era rule limiting bank overdraft fees to $5.
What happened to the overdraft fees
What stands out to me is that when it came to junk fees, service fees, and overdraft fees, we seemed to be on the same page—democrats and republicans.
President Joe Biden was on board, “There’s tens of billions of dollars in junk fees across the economy. I’ve directed by administration to reduce or eliminate them,” Biden said.
President Donald Trump brought musician Kid Rock into the White House to advocate for transparency when it comes to fees. “Anyone who has bought a ticket in the last 20 years knows it’s a conundrum. You buy a ticket for $100, but by the time you check out, it’s $170,” Rock said.
Trump was on board, “I checked it out and it’s a big problem,” Trump said.
Nevertheless, republicans revoked the rule and resurrected the $35 overdraft fee. Banks argue that they can’t keep offering overdraft protection if they can’t charge that $35 dollar overdraft fee.
That doesn’t just sound ridiculous to me, it’s laughable.
Credit card companies offer a 30-day grace period on purchases. Their business model gives 30-days interest free on purchases, cash rewards, and consumer protections, but you’re telling me that banks can’t float me $2.49 on a cheeseburger for a few days because I lost track of my balance?
How about we return to the good old days of insufficient funds? It might be embarrassing in the moment for the cashier to tell you that you have insufficient funds, but I’ll take that moment of embarrassment over these punitive fees.
Politico reports that one out of eleven Americans spend $350 or more in overdraft fees.
Banks are making $8 billion annually from these charges. What was once a courtesy has turned into a cash cow and the banking lobby appears to have won over republicans. Unfortunately, it looks like good ideas are only good ideas if your team comes up with them first.
Related: Noriega: Is it wrong to be a price-gouging ticket scalper?
