WASHINGTON ― Most credit card late fees will be capped at $8 under the Biden administration’s latest move targeting so-called “junk fees.”
The Consumer Financial Protection Bureau finalized a rule Tuesday that will close a loophole and slash late fees charged by credit card companies from an average of $32 to $8, which the agency projects will save $220 annually for 45 million Americans.
Credit card interest margins are at an all-time high, according to the CFPB, with credit card companies charging $105 billion in interest in 2022, costing the average card-holder about $250 a year.
The move follows action by the CFPB in January to reduce overdraft fees charged by banks by closing a regulatory loophole that had exempted overdraft lending services from provisions in the federal Truth in Lending Act of 1968.
Even though banks will still be able to charge limited overdraft fees, it cannot exceed the banks’ losses under the rule. The CFPB has not finalized an amount but is exploring overdraft fees capped at $3, $6, $7, or $14, plus $.50 per transaction. The overdraft rule is currently under review.
Prep for the polls: See who is running for president and compare where they stand on key issues in our Voter Guide
President Joe Biden has made cutting hidden “junk fees” charged by companies and bank on consumers a key piece of his economic agenda. The Council of Economic Advisers estimates the administration’s actions − which have targeted the banking, ticketing, airline and several other industries − will reduce more than $20 billion in junk fees annually.
Biden on Tuesday announced a new federal strike force on unfair and illegal pricing that will seek to “root out and stop illegal corporate behavior” that hikes prices on American families through anti-competitive, unfair, deceptive or fraudulent business practices. The task will be co-chaired by the Justice Department and the Federal Trade Commission.
In another move aimed at “junk fees,” the Federal Communications Commission proposed a new rule that would ban “bulk billing” arrangements in which landlords or providers charge everyone living or working in a building for internet, cable or satellite services even if they haven’t opted in.
Reach Joey Garrison on X, formerly Twitter, @joeygarrison.
Credit: Source link