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Excessive credit card fees rule overview:
- Who: The Consumer Financial Protection Bureau (CFPB) proposed a new rule aimed at curbing excessive credit card late fees.
- Why: The CFPB said credit card late fees cost American families around $12 billion every year.
- Where: The rule would take effect nationwide.
The Consumer Financial Protection Bureau (CFPB) proposed a new rule aimed at curbing excessive credit card late fees, which the watchdog says cost American families around $12 billion each year.
The CFPB says in a news release the proposed rule would “help ensure that over the top late fee amounts are illegal, and speculated it could reduce annual late fee charges by $9 billion.”
“Today’s proposed rule seeks to save families billions of dollars and ensure the credit card market is fair and competitive,” CFPB Director Rohit Chopra says in the release.
The CFPB’s proposed rule would amend regulations implemented in the Credit Card Accountability Responsibility and Disclosure Act of 2009 and ensure any late fees are “reasonable and proportional” to costs incurred by issuers.
Congress previously banned excessive late fees
While Congress previously banned excessive fees, Chopra says, “companies have exploited a regulatory loophole that has allowed them to escape scrutiny for charging an otherwise illegal junk fee.”
“When someone misses a payment due date, even if they paid a few hours after the deadline, the cardholder may be hit with an exorbitant late fee that far exceeds the credit card company’s costs to collect late payments,” the CFPB says.
In related news, a consumer filed a class action lawsuit against Capital One Financial Corp. last year, arguing the company used a bait-and-switch scheme to trick its customers into applying for a credit card.
Have you been charged excessive credit card fees? Let us know in the comments.
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12 thoughts onConsumer financial watchdog proposes rule to curb excessive credit card late fees
All my credit cards have charged me excessive fees including my banks
I live in California & I’ve been hit by late fees by capital one & home depot. I called to find out why as I pride myself for paying bills on time. I was told because I paid after the due date. I guess they’re on eastern time & when I get home from work at 3 pm pacific time & have time to pay bills it’s already hours later on east coast. Wow that’s really sneaky! And my actual card bill was $25 & Capital one charged me $27 late fee! That’s a Sucker punch.
I have 2 store credit cards issued through Comenity Capital Bank. There has been a few times that I had alot going on (Like EVERY HUMAN) got home from work & realized I didnt make my payment so I’d log on & pay. If I hit submit at 5:01 I was then hit with a $40 late fee. There was a period where the one store was having issues w/ their app, which is where I always make my payment. I contacted customer service to assist me, the csr informed me that shes had calls all day regarding the same issue. As i was making the payment w/ her, I asked her what my balance was bc I was unable to see it due to the issues the app was having. She says well if i leave this screen to do that your gonna miss the 5pm cut off & then charged a late fee. I said well if my balance is what I think it is, I’d like to just pay the entire amount. Needless to say, she did not check my balance due to the 5pm deadline which is ABSOLUTELY ABSURD!! If your making your payment on the due date, REGARDLESS of time, NO ONE should be charged a late fee. There ABSOLUTELY should be a law against that. Just bc its after the time Comenity has set doesnt change the date. Guess thats why it doesnt get reported to the credit bureaus as late bc in reality ITS NOT LATE!!
I have occurred they charges over the limit fees during the pandemic loss of income discover card and ollo I had money that was taken out of my checking account by consolidation company who claim to assist me with the issues that I was having and they did nothing to assist me but take money please add me.
I have a current deal with Capital one. They say to contact us if you are effect buy Covid we can help. Well I was sick and missed work but not from Covid. They say they will work with you and won’t charge late fees yet I keep getting them. Please add me
They always charge for late fees and if account is closed but still paying it off they won’t fix late fee.
I’ve paid Capital One and Home Depot on the due dates but I’m in California & I guess they use Eastern time.
So I’ve been late a couple of times. Why isn’t that time thing disclosed? The late fee is more than my monthly payment & it looks bad on your payment history.
I made a pmt on the date due. But the cut off time was only with in
a few minutes.
I’ve paid late fees, more than once, when I was literally minutes past the 5 pm cutoff.
Yes ive been hit by capital one and chase for late fees and the amounts are so high I can’t afford to pay them.