CFPB proposes lowering excessive credit card late fee cap to $8

The Consumer Financial Protection Bureau, or CFPB, announces that it has proposed a rule to curb excessive credit card late fees that cost American families about $12 billion each year. "The CFPB has preliminarily found that late fee income exceeds associated collection costs by a factor of five. Because the immunity provision currently allows issuers to charge late fees of up to $41, the CFPB believes that a late fee of $8 would be sufficient for most issuers to cover collection costs incurred as a result of late payments. The $8 immunity provision would apply to any missed payment. Companies would be able to charge above the immunity provision so long as they could prove the higher fee is necessary to cover their incurred collection costs," the Bureau stated. The CFPB also proposes to end the automatic annual inflation adjustment and to cap late fees at 25% of the required minimum payment. Reference Link