President Joe Biden's administration has finalized a rule that limits overdraft fees banks can charge.

The rule, announced on Thursday, places a cap on overdraft fees at $5. Biden has said that overdraft fees, which can reach as much as $35, are "exploitative."

"For far too long, the largest banks have exploited a legal loophole that has drained billions of dollars from Americans' deposit accounts," Rohit Chopra, director of the Consumer Financial Protection Bureau (CFPB), said in a statement.

Chopra added, "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."

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