Late fees would be capped at $8.
The Consumer Financial Protection Bureau is proposing an update to the 2009 regulation from the Credit Card Accountability Responsibility and Disclosure Act. The act requires credit card companies to charge “reasonable and proportional” fees to cover the costs of handling late payments.
CFPB says that the late fees can currently run as high as $41. Officials estimate that the fee is up to five times greater than the actual cost of collecting late payments.
“We worry that credit card companies are actually hoping that consumers are a day or two late so that they can cash in on fees,” CFPB Director Rohit Chopra stated.
“Companies would be able to charge above the immunity provision so long as they could prove the higher fee is necessary to cover their incurred collection costs,” a CFPB document stated.
As the Lord Leads, Pray with Us…
- For Director Chopra as he oversees the Consumer Financial Protection Bureau.
- For CFPB officials as they assess the reasonable limitations of late fees.
- For American consumers who are struggling to make ends meet as inflation and interest rates rise.
Sources: NBC News, Washington Post
