Jennifer Sutton, Stephen Meyer and Rodge Cohen authored an article in Law360 discussing potential implications of the CFPB’s proposed rule to reduce the safe harbor for credit card late fees from $30 to $8 and preclude issuers from charging higher fees for subsequent late fees. The aim of the CFPB’s provision is to “rein in excessive credit card late fees.”
“The proposed rule, if adopted in its current form, would revolutionize the current regulatory regime for assessing credit card late fees,” they write. The authors note that aspects of the CFPB’s proposal may run counter to the CFPB’s efforts to expand access to credit to underserved segments of the population and lead to greater potential harm to consumers and compliance risk to issuers. They also note that the CFPB has suggested that further restrictions on perceived “junk fees” may be in the offing, and that it could even eliminate the safe harbor for late fees.
Read, “CFPB Proposal Could Revolutionize Credit Card Late Fees.”