On Jan. 14, 2025, the Consumer Financial Protection Bureau (CFPB) withdrew its previously issued proposed rule that prohibited financial institutions from charging certain nonsufficient funds (NSF) fees when consumers initiate payment transactions that are instantaneously declined. These payment transactions would have included declined debit card purchases, Automated Teller Machine (ATM) withdrawals and some person-to-person payments. The CFPB had preliminarily determined charging these fees would constitute an abusive practice under the Consumer Financial Protection Act's (CFPA) prohibition on unfair, deceptive, or abusive acts or practices. 

The CFPB received nearly 8,000 comments on the proposed rule, from many financial institution trade groups, as well as financial institutions. They challenged the need for the rule, given the lack of prevalence of NSF fees covered by the rule and the fact that few, if any, institutions charge these types of fees. The CFPB stated while it is withdrawing this rulemaking, it will consider whether consumers lack understanding of other NSF fees and will determine whether a broader rulemaking would be more appropriate.

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