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The Consumer Financial Protection Bureau (CFPB) said it has closed a loophole on overdraft fees — limiting banks’ ability to charge them and potentially saving households hundreds of dollars.
The regulator said the “outdated” loophole exempted overdraft fees as a finance charge. The final rule, announced Thursday, makes several key updates to federal regulations governing overdraft fees for financial institutions with more than $10 billion in assets.
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Now, a bank will either be able to charge $5 for overdrafts — only a fraction of what consumers typically get hit with — or limit fees so that they cover no more than the lender’s costs.
An ATM dispenses twenty-dollar bills in Oahu, Kapolei, Hawaii, on July 26. (Smith Collection/Gado/Getty Images / Getty Images)
Banks will still…
