Rohit Chopra, director of the CFPB, testifies during the Senate Banking, Housing and Urban Affairs Committee hearing entitled “The Consumer Financial Protection Bureau’s Semiannual Report to Congress,” in the Dirksen Building on Thursday, 30 from November 2023.
Tom Williams | Cq-roll Call, Inc. | Getty Images
The Consumer Financial Protection Bureau unveiled a new rule on Tuesday that it said would cap late fees banks charge customers at $8 per incident.
By cutting late fees to $8 from an average of about $32, more than 45 million card users would save an average of $220 annually, the CFPB said in a release.
The new rule, long awaited after an initial proposal was presented last year, comes after the agency said it reviewed market data related to the Card Act of 2009. Regulations tied to that law gave issuers the ability to charge ever-increasing amounts of late fees.
“For more than a decade, credit card giants have exploited a loophole to reap billions of dollars in waste fees from American consumers,” CFPB Director Rohit Chopra said in the release. “Today’s rule ends the era of big credit card companies hiding behind the excuse of inflation as they raise fees to borrowers and bolster their own bottom lines.”
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