New Federal Rule Caps Bank Overdraft Fees at $5

The Consumer Financial Protection Bureau (CFPB) has finalized a rule limiting bank overdraft fees, potentially saving consumers $5 billion annually. The rule allows banks to charge a $5 fee, cover costs, or disclose the interest rate on overdraft loans, significantly reducing the average $35 fee. This move, part of the Biden administration's crackdown on excessive fees, faces opposition from banking groups and its future is uncertain, especially with potential changes in CFPB leadership under the Trump administration. The rule is set to take effect on October 1, 2025.