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Young people in Georgia on the brink of reshaping political landscape; Garland faces down GOP attacks over Hunter Biden inquiry; rural Iowa declared 'ambulance desert.'

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McConnell warns government shutdowns are "a loser for Republicans," Schumer takes action to sidestep Sen. Tuberville's opposition to military appointments, and advocates call on Connecticut governor to upgrade election infrastructure.

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An Indigenous project in South Dakota seeks to protect tribal data sovereignty, advocates in North Carolina are pushing back against attacks on public schools, and Arkansas wants the hungriest to have access to more fruits and veggies.

CFPB Proposal Would Lower Credit-Card Late Fees

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Monday, March 27, 2023   

The Consumer Financial Protection Bureau has proposed new regulations on credit card late fees, which could save Americans billions of dollars.

The bureau reported late fees cost cardholders about $12 billion a year. Congress attempted to ban excessive late fees in 2009, but the Federal Reserve still allowed companies to charge late fees up to $41. The new proposal would lower it to $8 and end an automatic yearly inflation adjustment for the fee amount.

Overall, the regulation would cap late fees at 25% of the minimum payment.

Daniel Rathfelder, vice president for card services for Coastal Federal Credit Union, said the new rules would help cardholders.

"I think overall, consumers are going to see some big pieces shift in their favor, if that gets adopted," Rathfelder observed.

Late fees are intended to cover collection costs, and some card issuers increase the fees with each additional missed payment. Under the proposal, companies would still be able to charge higher fees, if they can prove their collection costs are higher. The bureau estimated the new rule would save people as much as $9 billion a year. The agency is taking public comments until April 3.

The bureau also wants public comments on the possibility of a 15-day grace period beyond the due date before late fees can be assessed. Rathfelder noted in its public comment on the rule change, his credit union endorsed the idea.

"We pushed a little bit harder and said if consumers had a grace period, and the companies who could do automation around messaging and notification, getting people after the first day that it's due a notice saying, 'Hey, you missed this, but you have nine more days,' that would probably resolve a lot of the scenarios," Rathfelder explained.

Rathfelder added some enclaves of the financial services industry have already adopted grace periods, including for auto loans and mortgages.

Disclosure: Coastal Credit Union contributes to our fund for reporting on Budget Policy and Priorities, Civic Engagement, Community Issues and Volunteering, and Consumer Issues. If you would like to help support news in the public interest, click here.


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