Biden Administration Caps Credit Card Late Fees at $8

Source: Cardinal & Pine

The Biden administration recently unveiled a finalized regulation aimed at capping most credit card late fees at $8, marking the latest move to alleviate the burden of “junk fees” on middle- and working-class Americans.

Initially proposed in July, the Consumer Financial Protection Bureau (CFPB) estimates that this regulation will save American households over $10 billion annually by slashing fees from an average of $32.

CFPB Director Rohit Chopra emphasized the long-standing exploitation by credit card companies, stating, “For over a decade, credit card giants have been exploiting a loophole to harvest billions of dollars in junk fees from American consumers.” The rule targets “large” credit card issuers — those with over one million open accounts, including American Express, Discover, and Capital One — representing more than 95% of total outstanding credit card debt in the United States.

According to the CFPB, more than 45 million Americans incur late fees on credit cards annually, with an average annual savings projected at $220 per individual. The regulation also seeks to close loopholes that enable credit card companies to raise fees on late-paying borrowers.

Chuck Bell, advocacy program director at Consumer Reports, hailed the rule as a meaningful intervention, stating, “Credit card companies collect billions of dollars in excessive late fees at the expense of economically vulnerable families every year.”

However, the financial industry criticized the regulation, arguing that it might lead to more late payments and damage credit scores. The US Chamber of Commerce announced plans to file a lawsuit against the CFPB to prevent the regulation’s enforcement.

Scheduled to take effect 60 days after publication in the Federal Register, the rule faces potential delays due to legal challenges. Its release coincides with a concerning trend of rising credit card debt in the United States, which surpassed $1.1 trillion last month, and aligns with the Biden administration’s broader efforts to address the high cost of living ahead of the 2024 election.

In addition to this regulation, President Biden proposed a Federal Trade Commission (FTC) rule requiring transparent pricing across industries and another regulation mandating upfront pricing disclosures for cable, satellite, and internet services. These initiatives collectively aim to enhance consumer protection and transparency in pricing practices across various sectors.

Read more from Cardinal & Pine

Share:

More Posts

NC House Democrats Stand United Against SB 153

SB 153 is a right-wing bill that would burden local law enforcement, infringe on the rights of local governments, and further empower ICE to perform unconstitutional raids on North Carolina communities. 

Redadas de ICE en Charlotte y Concord: Intensificación de Arrestos de Inmigrantes en Carolina del Norte

En una reunión celebrada el 21 de mayo en la sede de ICE en Washington, el principal asesor del presidente Trump, Stephen Miller, y la secretaría de Seguridad Nacional, Kristi Noem, instruyeron a los oficiales de inmigración a aumentar los arrestos diarios a 3,000, triplicando la cifra alcanzada en los primeros meses del mandato de Trump. Este objetivo forma parte de un esfuerzo por ejecutar la operación de deportación más grande en la historia de Estados Unidos. 

Trump’s FEMA Denies North Carolina’s Hurricane Helene Aid Request, Again

“FEMA’s denial of our appeal will cost North Carolina taxpayers potentially hundreds of millions of dollars to clean up out west,” Stein explained. “The money we have to pay toward debris removal will mean less money toward supporting our small businesses, rebuilding downtown infrastructure, repairing our water and sewer systems, and other critical needs.”

3 Million People Could Lose SNAP Under GOP Plan, Gov. Stein Warns of NC Fallout

“If Congress goes forward with these plans, our state will be forced into perilous budget decisions – should North Carolinians lose access to food, or should we get rid of other essential services?” Gov. Stein wrote. “I urge our members of Congress to reject this budget proposal so that North Carolina families don’t go hungry.”