The CFPB continues its attack on all kinds of junk fees charged by banks. This time they are targeting credit card late fees.
In a long-anticipated move, this morning the CFPB unveiled a new rule that would cap credit card late fees at $8 per incident.
The average right now is around $32, so this would save the 45 million consumers who are charged late fees $220 per year.
Here is what CFPB Director Rohit Chopra had to say about implementing this new rule:
“For over a decade, credit card giants have been exploiting a loophole to harvest billions of dollars in junk fees from American consumers. Today’s rule ends the era of big credit card companies hiding behind the excuse of inflation when they hike fees on borrowers and boost their own bottom lines.”
The rule will only apply to card issuers with at least one million open card accounts so smaller issuers will be exempt.
It will go into effect 60 days after publication in the Federal Register.
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> New CFPB rule caps banks’ credit card late fees at $8
By cutting late fees to $8 from an average of around $32, more than 45 million card users would save an average of $220 annually, the CFPB said in a release.
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