February 2, 2023
$8
That’s the maximum *late fee* you’d pay on your credit card if the Biden Administration gets its way.
The Consumer Financial Protection Bureau just proposed a new regulation that would require the banks that issue credit cards to lower penalties for a missed or late payment to no more than $8. Right now those fees can be as much as $41.
Of course the banking industry hates this idea and says by making the late fee so low, it would actually encourage late payments and then would hurt the credit of the person who owns the debt.
The Bureau is doing this as part of the president’s push to reduce fees through an executive order. But here’s the thing. Congress doesn’t need to approve this. The Consumer Financial Protection Bureau says it has the authority to amend the rules all on its own thanks to a 2009 credit card law passed by Congress. (Credit Card Accountability Responsibility and Disclosure Act)
The public comment period is open for the next 30 days. The Bureau hopes to have this new rule in place by next year.
Read more about the proposal from the Bureau here.
