“I’m concerned that some credit card companies may actually want consumers to be a little late on their payments, given the billions of dollars in revenue generated on late fees,” CFPB Director Rohit Chopra said during an online news conference. Currently, credit card issuers are allowed to charge customers up to $30 for their first late payment and $41 for subsequent ones—and they’re allowed to hike the limits to keep up with inflation, according to federal rules set by the CARD Act of 2009. Chopra noted that those fees come on top of the extra interest borrowers have to pay for being late, essentially acting as a second penalty for the same infraction. The bureau, which has the authority to change the CARD Act rules, is now taking a hard look at them. A spokesperson for the American Bankers Association, a trade group representing card issuers, said that the fees already are highly regulated by the government, and that Chopra calling them “excessive” suggests he’s already made up his mind before the rulemaking process even begins. Earlier this year, an agency study showed that customers with lower credit scores, those who lived in lower-income areas, and those who were Black paid disproportionately more late fees on their credit cards. The bureau said the rulemaking process is likely to extend well past the end of the year. But it’s possible consumers could see changes even before any rules go into effect: Major banks, for example, in recent months have curtailed their overdraft fees simply in response to CFPB scrutiny. Have a question, comment, or story to share? You can reach Diccon at dhyatt@thebalance.com. Want to read more content like this? Sign up for The Balance’s newsletter for daily insights, analysis, and financial tips, all delivered straight to your inbox every morning!
