Elizabeth Warren pushes to finalize CFPB’s proposed decrease to credit card fee limit
Eden Villalovas
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Sen. Elizabeth Warren (D-MA) urged the Consumer Financial Protection Bureau to pass the agency’s proposed $8 limit on credit card late fees, a decrease from the current $30 for first-time late payments and $41 for subsequent late payments. Under the CFPB’s proposed rule, credit card issuers would be required to justify late fees in excess of $8.
The Democratic senator sent a letter to CFPB Director Rohit Chopra last week. It outlined findings from a recent investigation regarding late fees among ten of the largest credit card issuers.
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“This proposed rule is necessary to protect American consumers from the predatory practices of greedy financial institutions and furthers the Biden Administration’s efforts to root out junk fees,” Warren said.
Warren noted the bureau’s proposed rule, which was introduced in February, would save people up to $9 billion a year.
“American families have an opportunity to save billions in excessive credit card late fees,” Warren and several other Democratic senators wrote in a letter in May to some of the largest credit card issuers
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The CFPB stated in a press release earlier this year that the “proposed rule would lower the immunity provision for late fees to $8 for a missed payment as well as end the automatic annual inflation adjustment,” and it would ban “late fee amounts above 25% of the consumer’s required payment.”
The CFPB says the current immunity provisions created by the Federal Reserve Board, which sit at $30 for an initial late payment and $41 for subsequent late payments, are increased due to inflation.