Large US banks will have to cap overdraft fees at $5 — or an amount that covers their costs and losses — under a new consumer protection rule that’s been vigorously opposed by industry and Republicans.

The Consumer Financial Protection Bureau is closing a loophole that it says allowed big banks to profit heavily from overdraft fees. A new rule targets ban

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.

Big banks will now have to put a limit of $5 on overdraft fees, the Consumer Financial Protection Bureau said. The consumer finance watchdog's new rule could save customers $5 billion annually, and was part of the campaign against junk fees by the Biden administration.