The Consumer Financial Protection Bureau announced the final version of a rule limiting banks' ability to charge overdraft fees. It says the rule will save American consumers $5 billion annually. The CFPB said its overdraft rule will take effect Oct.

Consumers will save up to $5 billion in bank and credit union overdraft fees each year in a reform finalized Thursday by the U.S. Consumer Financial Protection Bureau.

CFPB’s new rule ends overdraft profits. Big banks must cap fees at $5, use cost-basis or fully disclose terms, saving US Americans billions each year.

In a final rule to be released Thursday, the Consumer Financial Protection Bureau would allow banks to either charge $5 for overdraft fees or another amount commensurate with costs. Banks could also charge more if they disclose the fees' annual percentage rate of interest to customers.

The Consumer Financial Protection Bureau installed the regulation less than two months before President-elect Donald Trump takes office.

Banks and credit unions with $10 billion or more in assets could alternately choose a break-even overdraft protection cost or make credit card-like disclosures to consumers, the CFPB said.

The U.S. watchdog agency for consumer finance on Thursday adopted new regulations capping the amount banks can charge for overdrafts, saying the rule would save depositors $5 billion annually.

The rule announced Thursday would require big banks and credit unions to slash long criticized high overdraft fees from $25 or $35 in many cases.

T he Consumer Financial Protection Bureau (CFPB) announced a new rule on Thursday (December 12) aimed at limiting bank overdraft fees. The rule targets banks and credit unions wit

Federal regulators have closed a bank overdraft fee loophole that could save American consumers billions of dollars each year.