Biden Admin Seeks to Slash Credit Card Late Fees to $8

The White House We will propose a rule to reduce credit card late fees by approximately $8 

The Consumer Financial Protection Bureau The rule will be presented by the (CFPB) at President Biden’s fourth Competition Council meeting.

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Signage seen at the Consumer Financial Protection Bureau headquarters, Washington, D.C., May 14th, 2021. (REUTERS/Andrew Kelly / Reuters

“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,” Rohit Chopra, Director of CFPB, stated in a press release. “Today’s proposed rule seeks to save families billions of dollars and ensure the credit card market is fair and competitive.”

The Biden administration The credit card companies claim that late payments are too costly compared to the high costs they impose on them.

“Specifically, the proposed rule would lower the immunity provision for late fees to $8 for a missed payment as well as end the automatic annual inflation adjustment,” The CFPB has announced. “The proposed rule would also ban late fee amounts above 25% of the consumer’s required payment.”

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Online payments for credit cards (istock / iStock)

This is the most recent step in President Biden declared his intention to fight “Junk fees“That unfairly preys on unwitting customers.

In an effort to provide more for American families, the U.S. government provided funding last year. “breathing room,” The White House called “all agencies to reduce or eliminate hidden fees, charges and add-ons for everything from banking services to cable and internet bills to airline and concert tickets.”

Biden has provided examples of Junk fees His administration seeks to eliminate all fees associated with hotel rebooking and airline rebooking for consumers. “resort” Unfair banking penalties and fees

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“Each year, these junk fees, in addition [to what] companies charge, cost Americans tens of billions of dollars — weighing down family budgets and making it harder for people to pay their bills,” Biden spoke at a 2022 press conference. “So my administration has taken action to eliminate these fees.”