{"id":2192851,"date":"2024-03-05T10:40:02","date_gmt":"2024-03-05T15:40:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/biden-administration-unveils-new-rule-to-cap-credit-card-late-fees-at-8\/"},"modified":"2024-03-05T10:48:11","modified_gmt":"2024-03-05T15:48:11","slug":"biden-administration-unveils-new-rule-to-cap-credit-card-late-fees-at-8","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/biden-administration-unveils-new-rule-to-cap-credit-card-late-fees-at-8\/","title":{"rendered":"New rule by Biden administration limits credit card late fees to $8"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">24<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fbiden-administration-unveils-new-rule-to-cap-credit-card-late-fees-at-8%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2192851&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><h2>The Consumer Financial Protection Bureau\u200d Takes Action to Cap Credit Card Late Fees<\/h2>\n<p>The\u200c Consumer Financial Protection Bureau (CFPB) has recently announced a new rule \u200cthat will \u200brequire\u2063 most banks to limit credit card \u200clate fees to\u2062 a maximum of $8. This move is part of the\u200d CFPB&#8217;s\u200c efforts, under President \u200bJoe Biden, to crack down on excessive fees imposed \u200bby financial institutions. By implementing this rule, the CFPB aims to close a\u200b loophole that has been exploited by <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/elizabeth-warren-pushes-to-finalize-cfpbs-proposed-decrease-to-credit-card-fee-limit\/\" title=\"Elizabeth Warren urges for swift approval of CFPB's credit card fee limit reduction.\">major credit card issuers<\/a>.<\/p>\n<p>The CFPB \u2064estimates that these fees cost consumers a \u2064staggering\u200c $14 billion annually. With the new rule in place, it is expected that consumers\u200d will save approximately $10 \u200dbillion\u2062 each year. CFPB Director Rohit Chopra\u200d emphasizes that the current \u2062rule allows large banks to profit from borrowers who unintentionally\u200d miss payments or\u200b struggle \u200bto pay on\u2062 time, \u200bwhich happens all too often.<\/p>\n<h3>Legislation and the Need \u2062for Change<\/h3>\n<p>In 2009,\u2064 legislation\u2064 was passed to limit credit card\u200d companies from charging\u2063 consumers more than $25 for the first \u200blate\u200b payment and $35 for subsequent late \u2064payments. The law also required banks to only charge fees that cover their \u2062costs \u2062associated with late\u2063 payments. However, these fees have increased\u200c over time, reaching $30 for the first\u2062 late payment and $45 for\u200b subsequent late payments. This \u2062is despite the fact\u200c that business operations have become more cost-effective \u2063with the rise of online processes.<\/p>\n<p>The new rule \u200dwill cap all \u2063<a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/biden-admin-seeks-to-slash-credit-card-late-fees-to-8\/\" title=\"Biden Admin Seeks to Slash Credit Card Late Fees to \">credit card late fees<\/a> at $8 and will no longer \u200badjust this amount for inflation. The Biden administration believes that this change will result in an average annual savings of $220 for over 45 million consumers who are charged late \u200dfees.<\/p>\n<p>It is important\u2064 to note that this rule only applies to the largest card issuers, \u2062those with over 1 million open accounts, which account for more\u2063 than 95%\u200b of the total \u2062outstanding balances. Smaller banks and credit unions will not \u200cbe affected.<\/p>\n<h3>Controversy and Opposition<\/h3>\n<p>The new rule\u2063 has faced criticism from \u2063industry \u2063leaders. Lindsey\u200c Johnson, President and CEO of the\u2064 Consumer Bankers Association, argues that \u200dthe rule will\u2062 only benefit a small minority of consumers who face late \u200dfees. \u200bJohnson believes\u200b that the costs of late payments will \u200bbe offset by increasing costs for the majority of\u200c cardholders who pay their bills on time.<\/p>\n<p>Senate\u200d Banking Committee ranking member Tim Scott\u2063 expresses concerns that lowering the \u200ccap on\u2064 credit card\u2064 late fees may limit access to credit\u2064 card \u2063programs for \u200dthose who need them the most. He believes \u200bthat lawful and contractually\u2064 agreed-upon payment incentives promote\u2062 financial discipline and\u200d responsibility, ultimately\u2064 protecting consumers&#8217; access to credit.<\/p>\n<p>House Financial Services Committee\u200c Chairman Patrick\u2062 McHenry accuses the Biden\u2064 administration of using financial regulators for \u200bpolitical purposes in an election year.<\/p>\n<h3>CFPB&#8217;s Ongoing Efforts<\/h3>\n<p>This latest rule\u200c aligns with\u200d other actions \u2062taken by the \u200cBiden\u200d CFPB. Last year,\u2064 the CFPB issued\u2063 guidance to prevent \u2063large \u200dbanks from charging excessive or \u200b&#8221;junk&#8221; fees for basic customer service.\u200b Under federal law,\u2063 big banks and credit unions are required to provide accurate \u2063account information upon customer\u200d request. The CFPB&#8217;s\u200c guidance clarified that customers \u2063should not be charged fees for these \u200bbasic inquiries.<\/p>\n<p>Overall, the CFPB&#8217;s new rule on credit card late fees aims to protect \u2064consumers\u200c from excessive charges and promote financial well-being.<\/p>\n<p><em>Click here to read more from \u2062The Washington Examiner.<\/em><\/p>\n<p> <\/p>\n<h2> How does capping credit card late \u2063fees align with the goal of\u200b encouraging \u2062responsible credit card usage and discouraging excessive reliance on credit<\/h2>\n<p><span>  $28 per <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/check-your-bank-statements-glitch-causes-customers-to-be-double-charged\/\" title=\"Bank customers double-charged due to glitch - review statements.\">credit card user<\/a>. This is a significant amount for \u2063many Americans, especially those who are already struggling financially.<\/p>\n<h3>The Impact on Consumers<\/h3>\n<p>Capping credit\u2063 card late fees will provide\u200b much-needed relief for \u2062consumers. Many individuals find themselves in situations where they unintentionally miss a payment or face financial difficulties that prevent them\u200c from paying\u200b on time. These late fees often exacerbate their financial burden, \u200bmaking it even more challenging for them to\u2063 get back on track.<\/p>\n<p>By\u200c limiting late fees to $8, the CFPB is ensuring that consumers are not burdened with \u200cexcessive charges that they cannot afford. This rule will provide a \u200bfair and\u2062 reasonable limit on fees, reducing the financial stress faced by many \u2064Americans. It will also encourage responsible credit card\u2064 usage and discourage excessive \u2062reliance on credit, as consumers will no longer be\u2063 punished with exorbitant late fees.<\/p>\n<p>Furthermore, the savings brought about by\u200b this rule \u2064will benefit the overall economy. When consumers have more money in their \u200dpockets, they are more likely to spend\u200c that money on goods and\u200b services, stimulating economic growth. This is particularly important in the \u2063current economic climate, where many individuals and businesses are still recovering \u2064from\u2063 the impacts of the COVID-19 pandemic.<\/p>\n<h3>Reactions from\u2063 the Financial Industry<\/h3>\n<p>Unsurprisingly, the new rule has received mixed reactions from \u2062the financial industry. While consumer\u2064 advocates and some lawmakers applaud the CFPB&#8217;s efforts to protect consumers and promote financial fairness, some financial institutions argue that \u2062this rule may have unintended consequences.<\/p>\n<p>Opponents of\u2063 the \u2064rule claim that capping credit card late fees at $8 may lead to an increase \u2063in interest rates or other fees in order to compensate for the lost revenue. They argue that this could harm consumers in the \u200dlong run and undermine the goal of providing financial \u2062relief.<\/p>\n<p>However, supporters of the rule argue that banks should not \u2064rely \u200don excessive late fees as a source of profit. Instead, they should focus on providing fair and transparent financial services to their\u200b customers. By capping\u200d late fees, banks are encouraged\u2063 to explore alternative ways to mitigate\u200d the risks associated with \u200blate payments, such as offering better customer education, flexible payment options, and personalized financial assistance.<\/p>\n<h3>Conclusion<\/h3>\n<p>The Consumer Financial Protection Bureau&#8217;s action \u2062to\u2062 cap credit card \u2063late fees at a maximum of $8 is a \u200dsignificant step towards protecting consumers from excessive and unfair\u200c fees. By implementing this rule, the CFPB aims to <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/snls-trump-de-banking-gaff-accidentally-elevates-hot-button-issue\/\" title=\"SNL's Trump 'De-Banking' blunder boosts controversial topic\">hold financial institutions accountable<\/a> and promote financial\u2063 fairness.<\/p>\n<p>This rule will provide relief to consumers and help them avoid unnecessary financial burdens caused by \u200blate fees. The \u200bestimated savings of $10 billion per year\u200b will have a positive \u200dimpact on the overall economy, <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/antony-blinken-says-u-s-and-israel-will-review-intel-failure-goal-remains-to-repel-hamas\/\" title=\"Blinken: U.S. and Israel to assess intel failure, still focused on countering Hamas.\">encouraging consumer spending<\/a> and economic growth.<\/p>\n<p>While there have been concerns raised by the financial industry,\u200d it is important to focus on the goal \u2063of providing financial relief \u200cand fairness for consumers. This rule serves \u2062as a reminder \u2062that\u2062 financial institutions should prioritize their customers\u2019 well-being and financial \u2063security.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Consumer Financial Protection Bureau (CFPB) has introduced a new rule that will require banks to limit credit card late fees to $8. This move is part of the CFPB&#8217;s efforts, under President Joe Biden, to address excessive fees imposed by financial institutions. By implementing this rule, the CFPB aims to close a loophole that has been exploited by major banks<\/p>\n","protected":false},"author":2683,"featured_media":2192852,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/wex-s3.s3.us-east-1.amazonaws.com\/wp-content\/uploads\/2023\/12\/6b71bf3df450d4e294379e302e5c776a-1024x591.jpg","fifu_image_alt":"","footnotes":""},"categories":[538],"tags":[],"class_list":["post-2192851","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-washington-examiner"],"fifu_image_url":"https:\/\/wex-s3.s3.us-east-1.amazonaws.com\/wp-content\/uploads\/2023\/12\/6b71bf3df450d4e294379e302e5c776a-1024x591.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2192851","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/2683"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2192851"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2192851\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2192852"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2192851"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2192851"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2192851"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}