Credit-Card Late Fee Regulation

Following on a controversial advance notice of proposed rulemaking, the CFPB has now released an NPR setting specific standards for credit-card late fees that also eliminates the inflation adjustments established by the Federal Reserve when implementing the 2009 credit-card law.  The NPR also seeks comment on still more stringent late-fee restraints and limits on some or all of the other penalty fees now charged by some credit-card issuers.  When issuing the ANPR, the Bureau also noted that it plans to advance other initiatives under its “junk-fee” standards, likely starting with those pursuant to the Electronic Funds Transfer Act affecting a wide range of payment and transaction-account products.  Should it then follow the model proposed here for credit cards, significant alterations in current business practice could occur with uncertain consumer benefits despite nominal upfront savings.