Feds move to crack down on ‘excessive’ credit-card late fees


President Joe Biden is spotlighting new moves by the Consumer Financial Protection Bureau to cut excessive credit-card late fees that cost American families about $12 billion each year.

The CFPB unveiled proposals that will potentially save Americans up to $9 billion a year by targeting late fees that are currently protected by an “expansive” immunity provision, which has allowed credit-card companies to hike fees along with inflation even when they face no additional collection costs.

“Junk fees are not only costly to consumers, but they can stifle competition by encouraging companies to use increasingly sophisticated tools to disguise the true price consumers face,” the White House said in a statement on Wednesday. “By reducing these fees and increasing transparency, we can provide relief to consumers and make our economy more competitive, particularly for new and growing businesses.”

Biden is also calling on Congress to pass a junk-fee prevention bill to crack down on concert-ticket fees and airline fees aimed at families who want to sit with their young children; to eliminate early-termination fees for TV and internet service; and to ban surprise resort and destination fees.

The proposed CFPB rule would lower the immunity provision for late fees for a missed payment to $8 from as much as $41 now and end an automatic annual inflation adjustment. It would also prohibit late-fee amounts higher than 25% of a consumer’s required payment.

The CFPB rule would amend regulations in the Credit Card Accountability Responsibility and Disclosure Act of 2009, which includes language that late fees should be “reasonable and proportional” to the costs incurred by issuers to handle late payments.

Major credit-card issuers in the U.S. include companies such as American Express Co.
Discover Financial Services
Mastercard Inc.

and Visa Inc.
as well as major banks such as JPMorgan Chase & Co.
Wells Fargo & Co.
Citigroup Inc.

and Bank of America Corp.

Also read: It’s ‘pay’ time for buy now, pay later purchases—here are 5 ways to handle the debt


Source link


Jacob Keiter is a husband, a writer, a journalist, a musician, and a business owner. His journey to becoming a writer was one that was paved with challenges, but ultimately led him to find his true calling. Jacob's early years were marked by a strong desire for creative expression. He was always drawn to music, and in his youth, he played in several bands, chasing the elusive promise of fame and success. However, despite his best efforts, Jacob struggled to find the recognition he craved. It wasn't until he hit a low point in his life that Jacob discovered his love for writing. He turned to writing as a form of therapy during a particularly difficult time, and found that it not only helped him to cope with his struggles, but also allowed him to express himself in a way that he had never been able to before. Jacob's writing skills quickly caught the attention of others, and he soon found himself working as a journalist for The Sun out of Hummelstown. From there, he went on to contribute to a variety of publications, including the American Bee Journal and Referee Magazine. Jacob's writing style is reflective of traditional journalism, but he also infuses his work with a unique voice that sets him apart from others in his field. Despite his success as a writer, Jacob also owns another business, JJ Auto & Home, which specializes in cleaning. Jacob's commitment to excellence is evident in all of his endeavors, whether it be in his writing or in his business ventures. Today, Jacob is the author of two books and continues to inspire others through his writing. His journey to becoming a writer serves as a reminder that sometimes our darkest moments can lead us to our greatest achievements.

Related Articles

Leave a Reply

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