Elizabeth Warren urges for swift approval of CFPB’s credit card fee limit reduction.

Sen. Elizabeth Warren Urges Consumer Financial Protection Bureau to Limit Credit Card Late Fees

Sen. Elizabeth Warren (D-MA) is pushing for the Consumer Financial Protection Bureau (CFPB) to implement a proposed rule that would cap credit card late fees at $8. This would be a significant decrease from the current fees of $30 for first-time late payments and $41 for subsequent late payments. Under the new rule, credit card issuers would be required to justify any late fees exceeding $8.

In a letter addressed to CFPB Director Rohit Chopra, Sen. Warren highlighted the findings of a recent investigation into late fees charged by the ten largest credit card issuers. The investigation revealed the need for stricter regulations to protect consumers from predatory practices.

Protecting American Consumers

Sen. Warren emphasized the importance of the proposed rule in safeguarding American consumers from the exploitative practices of financial institutions. She stated, “This proposed rule is necessary to protect American consumers from the predatory practices of greedy financial institutions and furthers the Biden Administration’s efforts to root out junk fees.”

The senator also highlighted the significant financial impact of the proposed rule, estimating that it could save people up to $9 billion annually.

Sen. Warren, along with several other Democratic senators, previously expressed their support for the proposed rule in a letter to major credit card issuers. They emphasized the potential for American families to save billions of dollars in excessive credit card late fees.

The CFPB’s Proposed Rule

The CFPB’s proposed rule, introduced in February, aims to lower the immunity provision for late fees to $8 for missed payments. It also seeks to eliminate the automatic annual inflation adjustment and ban late fee amounts exceeding 25% of the consumer’s required payment.

The current immunity provisions, set by the Federal Reserve Board, have been increased over time due to inflation. The CFPB believes that implementing the proposed rule will provide better protection for consumers and prevent excessive late fees.

For more information, click here to read the full article from The Washington Examiner.