The Consumer Financial Protection Bureau finalized rules on Thursday that would cap how much banks can charge their customers for overdrawing their checking accounts, potentially crushing a lucrative source of revenue for the industry that has long been a source of customer complaints.

The move drew a rebuke from trade groups and could face a quick repeal under the Trump administration.

The new regulation, first proposed earlier this year, would require large banks and credit unions to either charge just $5 for overdrafts or, alternatively, pick an amount no higher than the cost of offering overdraft protection. Today, banks commonly charge $30 to $35 on overdrafts.

Banks that want to continue charging more would be required to treat overdraft protection fees similarly to credit cards and other loan products by offering more disclosures about their costs while hewing to additional stringent regulations.

"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. "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.”

Banks have long maintained that overdraft protection — which allows customers to draw their balance below zero in return for a fee — serves as a helpful, last-minute source of credit for people facing a cash crunch or an emergency expense. But consumer advocates have criticized the charges as a predatory tool for scraping profits off lower-income customers.

While individuals are required to opt in to the services, a 2023 Pew poll found that 71% of Americans felt a $35 fee was unfair (75% said a $10 fee would be fine).

The CFPB has taken aim at overdrafts as part of the Biden administration’s “junk fee initiative,” which has sought to crack down on nickel-and-dime charges on everything from concert tickets to credit cards.

In September, the agency issued guidance aimed at stopping banks from using “phantom” opt-in agreements, where they charge overdrafts without obtaining proof of consent. It has also forced them to refund hundreds of millions of dollars in nonsufficient fund fees, which are charged to customers who accidentally try to overdraw their accounts and are rejected.

Some banks have responded to the pressure from regulators and consumers by voluntarily cutting back on overdraft fees. Bank of America, for instance, lowered its charges from $35 to $10 in 2022. In 2023, banks collectively earned $5.83 billion in revenue off overdraft and nonsufficient fund fees, down from nearly $12 billion in 2019.