Save Money! New Rule Limits Bank Overdraft Fees to Just $5

A giant loophole has just been closed in the banking world, saving American households an estimated hundreds of dollars per year.

The Consumer Financial Protection Bureau (CFPB) has just put into place a rule that all banks must abide by: No longer will you have to pay $35 or more in penalties for an overdrafted bank account — that limit has been lowered to just $5.

Essentially, banks have two options if you overdraft your account: They can charge you the $5, or they must limit fees so that they cover no more than the lender’s costs.

It can happen even to the tightest-run households in America. You think you have enough in your checking account to cover the week’s expenses, but something hits the account without your knowledge and boom, you are overdrafted and subject to whatever fees that your bank decides to levy on you.

Now, in a huge shift of power, we the consumer finally have the upperhand on something. This of course doesn’t give you the freedom to overspend on the daily, but if it happens from time to time, you won’t get hammered with hefty overdraft fees from your bank anymore.

CFPB Director Rohit Chopra proclaims that, “For far too long, the largest banks have exploited a legal loophole that has drained billions of dollars from Americans’ deposit accounts.”

Rohit explained that now the CFPB has stepped in “requiring big banks to come clean about the interest rate they’re charging on overdraft loans.”

The CFPB said this new rule is expected to generate $5 billion in annual overdraft fee savings for consumers, or about $225 per household that pays overdraft fees.

As we all know, anytime you can save a dollar in today’s economy, it’s a good day.