Biden administration finalizes rule cutting credit card late fees [View all]

Source: ABC News

March 5, 2024, 5:00 AM


The Consumer Financial Protection Bureau finalized a rule Tuesday that will cut the typical credit card late fee to $8 from $32.

The financial regulator estimates the move will save American families $10 billion every year -- an average savings of $220 annually for more than 45 million people who are charged late fees when they don't pay their statements by the due date.

"Today's rule ends the era of big credit card companies hiding behind the excuse of inflation when they hike fees on borrowers and boost their own bottom lines," CFPB Director Rohit Chopra said in a statement.

The agency said its new rule closes a loophole in a federal law called the CARD Act that allowed major credit card issuers to charge customers growing fees when they were late on their payments. Over time, those late charges ballooned to as much as $41. The new rule would cap them at $8. It would also prevent card issuers from automatically increasing fees based on inflation.

Read more: https://abcnews.go.com/US/biden-administration-finalizes-rule-cutting-credit-card-late/story?id=107799462