The rule, which applies to the banks and credit unions with more than $10 billion in assets, gives these institutions three options: They can charge an overdraft fee of $5; charge a fee that covers their costs or losses; or continue to charge fees of any amount, so long as they disclose the terms of the overdraft loan and are compliant with lending laws.Banks can currently charge as much as they want in overdraft fees. On average, they charge around $35 each time a customer overdraws funds from their accounts, according to the CFPB.
The CFPB expects the rule to save consumers $5 billion annually in overdraft fees, or $225 per household that pays overdraft fees.
“For far too long, the largest banks have exploited a legal loophole that has drained billions of dollars from Americans’ deposit accounts,” CFPB Director Rohit Chopra said in a statement Thursday. “The CFPB is cracking down on these excessive junk fees and requiring big banks to come clean about the interest rate they’re charging on overdraft loans.”
