watchdog:-final-biden-credit-card-late-fee-rule-will-lower-costs-for-americans-over-industry-objections

Watchdog: Final Biden Credit Card Late Fee Rule Will Lower Costs for Americans Over Industry Objections

In a historic action expected to save 45 million Americans up to $10 billion every year, the Consumer Financial Protection Bureau (CFPB) finalized a rule to cap most credit card late fees at $8, down from an average of $30. New analysis from government watchdog Accountable.US found that the 8 largest credit card issuers charged consumers billions in credit card late fees and other service charges in 2023 alone, while the CFPB identified late fees as “the most significant fee assessed to cardholders in both dollar amount and frequency” and a major contributor to the more than $1 trillion in outstanding credit card debt in 2022. As Accountable.US documents in today’s report, the cost-saving action has already faced significant industry pushback and will likely run into immediate legal and legislative attacks from big banks that abuse the junk fee practice. “Big banks have no need to nickel and dime everyday families with hidden, high-cost late fees based on the massive profits they brag about to wealthy investors. Bank industry lobbyists claim junk fees teach responsibility, but families who are price-gouged with late fees as high as $41 buried in the fine print only get a hard lesson in corporate greed,” said Accountable.US’ Liz Zelnick. “The Biden administration’s latest crackdown on needless junk fees won’t just lower costs for millions of Americans, it will put billions back into the economy to be spent on goods and services instead of padding profits of greedy banks,” added Zelnick.WHAT YOU NEED TO KNOW ABOUT CREDIT CARD LATE FEES: New Accountable.US research shows that the eight largest credit card issuers—six of which serve either on the boards of either the American Bankers Association or Consumer Bankers Association—have criticized the late fee rule or the CFPB itself while collecting billions in revenue from card fees, helping to fuel billions in profits.The Consumer Financial Protection Bureau’s newest rule is expected to put $10 billion per year back into the pockets of 45 million people, roughly $220 per person, per year.An Accountable.US analysis of recent corporate earnings and legal settlements debunks dubious claims from big bank CEOs that claim they cannot maintain profits without high-cost junk fees. House Financial Services Committee Chair Rep. McHenry (R-NC) has aggressively attacked the CFPB’s proposed rulemaking on credit card late fees without mentioning he has taken over $1.1 million from the eight largest credit card issuers and banking industry trade groups, including the Consumer Bankers Association, the American Bankers Association, and the Independent Community Bankers Of America, who decried the proposed rule. Last year, Senate Banking Committee Republicans sent a letter to CFPB Director Rohit Chopra demanding he “promptly rescind” the CFPB’s proposed rule cracking down on abusive credit card industry late fees, but neglected to mention they took over $2.2 million from banking trade groups opposed to the rule and the eight largest credit card issuers. An Accountable.US analysis dispelled top myths employed by the credit card industry to excuse hidden and excessive late fees – including claims that lowering these junk fees will somehow have adverse effects on borrowers and that high credit card fees are somehow beneficial to consumers., In a historic action expected to save 45 million Americans up to $10 billion every year, the Consumer Financial Protection Bureau (CFPB) finalized a rule to cap most credit card late fees at $8, down from an average of $30. New analysis from government watchdog Accountable.US found that the 8 largest credit card issuers charged consumers billions in credit card late fees and other service charges in 2023 alone, while,2024-03-05 15:58:00,Read More

from Common Dreams