FOR IMMEDIATE RELEASE

April 18, 2024

CONTACT
Carter Dougherty, carter@ourfinancialsecurity.org

Committee Majority Lines up with Wall Street in Vote to Roll Back Late Fee Cap

The House Financial Services Committee voted to overturn a regulation capping credit card late fees, putting a majority of its members squarely on the side of big banks that have ripped off consumers for years.

“This new protection benefits all credit card users and rolling it back would be nothing more than a gift to big Wall Street banks,” said Amanda N. Jackson, consumer campaign director at Americans for Financial Reform. “The industry makes billions off junk fees like late charges, and for too many lawmakers corrupted by its money, that’s okay.”

The new rule, finalized by the Consumer Financial Protection Bureau on March 5, would reduce the typical late fee on credit cards from $35 to $8, saving consumers $10 billion each year. For the 45 million households that pay late fees, that amounts to an annual savings of $220.

Using the Congressional Review Act, the House Financial Service Committee yesterday voted to overturn the regulation on a straight partisan vote of 28-22. The full House will then vote on the rollback in the coming weeks.

Over 90 public interest groups wrote lawmakers on April 16 urging them to support the CFPB regulation.

“The prevalence of credit card late fees is not merely an issue of financial inconvenience but one that exacerbates existing inequalities in our society,” the groups wrote. “Research by the CFPB has consistently shown that low-income individuals and people of color bear the brunt of these fees, with those making less than $32,000 annually paying twice as much in late fees as those making $150,000.”

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