The Bank Slate


CFPB proposal would lower cap for credit card late fees

The Consumer Financial Protection Bureau plans to cap credit card late fees at $8 as part of a series of proposals to curb what it believes to be excessive charges.

The agency said in a press release that the proposal aims to adjust the safe harbor dollar amount for late fees to $8 and eliminate a higher safe harbor dollar amount for late fees for subsequent violations of the same type.

Credit card issuers that want to charge higher fees must demonstrate that the charge is justified.

Currently, late fees are capped at $30 for the initial infraction and $41 for subsequent missed payments.

The proposal would also provide that the current provision that provides for annual inflation adjustments for the safe harbor dollar amounts would not apply to the late fee safe harbor amount. The CFPB also wants to cap late fee amounts at 25% of the required payment.

Comments are due by April 3.

Leave a Reply

Your email address will not be published. Required fields are marked *