Consumers stand to save billions each year if new rule is adopted
Advocacy groups representing consumers are cheering the news that the Consumer Financial Protection Bureau (CFPB) is taking steps to limit credit card late fees. The proposed rule, if adopted, would effectively cap late fees at $8 rather than the current maximum of $41.
The groups noted that the annual savings to consumers is expected to be around $9 billion.
“Regulations seldom deliver such concrete benefits to consumers as the plan that the CFPB has set in motion today,” said Elyse Hicks, consumer policy counsel at Americans for Financial Reform. “This agenda, created after the financial crisis in 2008, is as relevant as ever, looking out for Americans’ financial interests, and keeping an eye on the big banks and predatory lenders who would rip them off.”
Advocates said the current climate is one of financial bullying and that the CFPB's action strikes a blow for consumers in the financial marketplace.
“Despite Congress’s ban on excessive late fees, the Federal Reserve’s loophole has allowed greedy credit card companies to collect exorbitant charges that were designed to profit from consumers living paycheck-to-paycheck,” said Liz Zelnick, Director of Economic Security and Corporate Power at Accountable.US. “The CFPB’s crackdown on these exploitative charges will redirect billions from the pockets of big banks to consumers' wallets and our economy. Today’s rule proposal proves that the bullying behavior of companies who abuse Americans for their own profit will not stand from the CFPB.”
Both groups noted that more should be done to rein-in junk fees - such as late fees and overdraft charges - that unfairly punish consumers.
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