This may be some good news for a lot of people using their credit cards to get by. Via CNBC:
WASHINGTON — The federal government’s consumer protection watchdog proposed a new rule on Wednesday to ban excessive credit card late fees, potentially reducing them by as much as $9 billion per year. Congress banned exorbitant credit card fees under the Credit CARD Act in 2009, but an immunity provision instituted by the Federal Reserve Board of Governors enabled card companies to dodge enforcement standards, said Rohit Chopra, director of the Consumer Financial Protection Bureau.
“Over a decade ago, Congress banned excessive credit card late fees, but companies have exploited a regulatory loophole that has allowed them to escape scrutiny for charging an otherwise illegal junk fee,” Chopra said. “Today’s proposed rule seeks to save families billions of dollars and ensure the credit card market is fair and competitive.”
Late fees cost American families around $12 billion a year in addition to billions in interest, the CFPB said. Credit card issuers that hike fees with inflation are also protected by immunity clauses, according to Chopra.
The CFPB rule proposed Wednesday would lower the amount consumers can owe for late fees under the immunity provision to $8 from as much as $41, end the automatic annual inflation adjustment for the provision and cap late fees at 25% of the minimum payment owed by the cardholder.
