By Jordan Valinsky, CNN

New York (CNN) — The Consumer Financial Protection Bureau has finalized a rule that curbs excessive overdraft fees charged to customers of large banks and credit unions, potentially saving consumers as much as $5 billion a year.

The rule, unveiled Thursday, would cap overdraft fees at $5 — a substantial savings from the $35 that customers are typically charged. In total, households that pay overdraft fees could save about $225 per year, according to CFPB. Additional options for banks would allow them to either cap fees at amounts that just cover their costs or to treat an overdraft like any other loan by disclosing terms like interest rates.

“For far too long, the largest banks have exploited a legal loophole that has drained billions of dollars from Americans’ deposit accounts,” Rohit Chopra, the bureau’s director, said in a press release. “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.”

“Excessive overdraft fees have saddled hardworking Americans with charges that really add up, preventing them from getting ahead,” said Lael Brainard, head of the National Economic Council, in a statement. “That is real relief for families.”

Banking trade groups oppose the new rule and note that it could backfire. They also cited development of next-day grace periods and the elimination of non-sufficient funds fees as just two ways banks have innovated and competed to serve consumers best in recent years.

“(T)he Bureau has once again chosen to prioritize demonizing highly regulated and transparent bank fees over its mission to help consumers. This rule, and the government price controls that accompany it, will make it significantly harder for banks to offer this valuable service to their customers, including those who have few other options to cover essential payments,” said Rob Nichols, president and CEO of the American Bankers Association.

The proposal was first announced in January as part of President Joe Biden’s crackdown on junk fees and attempt to bring about more transparency on charges including on airline tickets, live events, car rentals, hotels, banking services, retirement advice and credit cards.

An overdraft fee is charged when the bank or credit union covers a deposit account holder’s transaction — a payment, withdrawal, debit or transfer when there is not enough money in that account.

Congress created the bureau in the wake of the 2008 financial crisis to protect consumers from financial abuses and to serve as the central agency for consumer financial protection authorities. It has faced numerous legal challenges to its rules and even its very existence over the years. While this latest overdraft rule is set to take effect on October 1, 2025, there’s no guarantee it will, given anticipated efforts to quash it and possible Republican opposition to it once President-elect Trump takes office in January.

Nichols of the ABA characterized the rule as a “price cap” that he said the CFPB did not have the legal authority to set.

And Lindsey Johnson, president and CEO of the Consumer Bankers Association, characterized CFPB’s action Thursday as a “blatant overreach of its statutory authority” in a statement.

The fight ahead may be multi-pronged.

“We expect legislative, regulatory and legal challenges, with litigation (being) the most likely option to block the rule,” said Jaret Seiberg, financial services policy analyst at TD Cowen Washington Research Group, in his morning research note.

But, Seiberg added, “Problem for the banks is we see the overdraft cap as consistent with GOP populism.”

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CNN’s Jeanne Sahadi contributed to this report.