The Biden administration is moving to cap credit card late fees at $8, which now cost consumers about $32.
CBS NEWS
The Biden administration announced a rule Tuesday to cap all credit card late fees at $8, or about one-quarter of the average late fee of $32. It’s the latest effort from the White House to attack what it calls “junk fees,” or excessive fees that can push up the end price of products.
The Consumer Financial Protection Bureau’s new regulations will set a ceiling of $8 for most credit card late fees, or require banks to show why they should charge more than $8 for such a fee. The effort will save Americans up to $10 billion a year, the agency estimates.
The push comes a year after President Joe Biden vowed to ban junk fees in his 2023 State of the Union address, calling them “unfair.” Junk fees generate big money for businesses, ranging from airlines to financial services firms, with consumers paying at $90 billion annually in excessive charges, the White House said on Tuesday.
“In credit cards, like so many corners of the economy today, consumers are beset by junk fees and forced to navigate a market dominated by relatively few, powerful players who control the market,” said Rohit Chopra, director of the CFPB, in a statement.
