Credit card late fees currently cost Americans about $14 billion per year, the Biden administration says.
Topline
A Biden administration “strike force” announced several rule changes and regulations on Tuesday designed to combat “junk fees,” including a new rule that could lower credit card late fees to as low as $8.Key Facts
The Consumer Financial Protection Bureau is seeking to cap the average fee for most late credit card payments at $8, down from around $32, closing what CFPB described as a loophole exploited by credit card companies.
The Credit Card Accountability Responsibility and Disclosure Act, passed by Congress in 2009, was supposed to curb fees that were higher than necessary to cover the costs of late payment—but the law allowed credit card companies to continue raising fees pegged to inflation so long as the first fee charged was only $25.
CFPB says the rule change will address one of the most expensive “junk fees” the Biden administration has identified, which currently costs Americans $14.5 billion per year.
According to the CFPB, an estimated 45 million Americans pay credit card late fees every year, and these consumers will see average annual savings of about $220.
Additionally, a proposed Federal Communications Commission rule will ban “bulk billing” by landlords for services like electricity, internet and cable for an entire building, even if renters don’t use the service.
