New rule limits bank overdraft fees: What to know
Published On Dec 12, 2024, 2:02 PM
The Consumer Financial Protection Bureau (CFPB) has enacted a new rule that significantly curtails overdraft fees imposed by banks. This regulation targets large financial institutions and limits their capacity to charge overdraft fees, which are typically $35, to a maximum of $5 per transaction or the actual cost incurred by the bank. The rule, aimed at closing an outdated loophole, is expected to save consumers around $5 billion per year, translating to approximately $225 savings for each household that incurs these fees. This move is seen as a step to hold banks accountable for excessive fees and improve access to banking services for many consumers.