CFPB Issues Final League-Opposed Credit Card Penalty Fee Rule

The Consumer Financial Protection Bureau today issued its final rule on credit card penalty fees.

The rule amends Regulation Z, which implements the Truth in Lending Act (TILA), to address late fees charged by card issuers that together with their affiliates have one million or more open credit card accounts (referred to as “Larger Card Issuers” herein). This final rule adopts a late fee safe harbor threshold of $8 for those issuers and provides that the annual adjustments to reflect changes in the Consumer Price Index (CPI) do not apply to this $8 amount.

"We maintain that the Bureau's rule fails to consider the negative consequences likely to result from the regulation, including interest rate hikes and changes to other terms and fee amounts," notes League Chief Advocacy Officer JT Blau. The proposal also does not take into account credit unions' member-owned, not-for-profit business model, which incentivizes credit unions to keep fees reasonable and proportionate to the costs of providing the service. In our comment letter on the then-proposed rule, we urged the Bureau to recognize that the rule would ultimately cause more harm to more consumers, which also far outweigh any potential benefits." 

Learn more about the rule

Related Articles:

• League Files Comment Letter on Credit Card Late Fees; Notes 'Negative Consequences' of CFPB Proposal
• CFPB's Credit Card Late Fee Proposal Could Hit Small Institutions Hard
• Credit Card Rate Cap Bill Would Hurt Consumers, Negatively Impact Access to Credit
• League Notes CFPB's Focus, Recent Action on 'Fees' Will Harm CUs, Members
• Trade Groups Seek More Time to Comment on CFPB's Proposed Credit Card Fee Cuts