Senators Warren, Brown, Lawmakers Seek Answers from Credit Card Issuers on Exorbitant Late Fees
“American families have an opportunity to save billions in excessive credit card late fees and will benefit greatly from the CFPB’s efforts to curb these practices.”
Washington, D.C. – U.S. Senator Elizabeth Warren (D-Mass.), along with Senators Sherrod Brown (D-Ohio), Chair of the Senate Banking, Housing, and Urban Affairs Committee, Jack Reed (D-R.I.), Richard Blumenthal (D-Conn.), Tammy Baldwin (D-Wis.), Peter Welch (D-Vt.), and Bernie Sanders (I-Vt.), sent a letter to ten of the largest credit card issuers – PNC, JPMorgan Chase, Capital One, Citigroup, Discover, Bank of America, American Express, Wells Fargo, US Bancorp, and USAA – requesting information on their credit card late fee practices following the Consumer Financial Protection Bureau’s (CFPB) proposed rule to limit exorbitant late fees and the banking lobby’s strong pushback against this proposed rule.
“The CFPB has found that American families lose an estimated $12 billion a year to credit card late fees,” wrote the lawmakers. “Consumers, even those who may only be a few hours behind on a credit card payment, may be slapped with fees as high as $41.”
In February of this year, the CFPB proposed a new rule that would require credit card issuers to justify late fees in excess of $8. The rule would also terminate automatic annual inflation adjustments to late fees and cap late fees at 25% of the required minimum payment. Together, these actions could save American families up to $9 billion a year. The proposed rule has also prompted strong pushback from the bank lobby, which has claimed that the CFPB’s efforts would harm consumers.
“While the banking industry has opposed the proposed rule and argued that saddling Americans with excessive late fees is essential for teaching them ‘responsible credit management’ or ‘timely repayment,’ consumers have filed thousands of complaints related to credit card late fees with the CFPB,” wrote the lawmakers.
The lawmakers are asking the CEOs of PNC, JPMorgan Chase, Capital One, Citigroup, Discover, Bank of America, American Express, Wells Fargo, US Bancorp, and USAA to provide information on their role in the ongoing effort to quash the CFPB’s money-saving rule no later than May 23, 2023.
- On February 15, 2023, Senator Warren delivered a speech on the fight to protect our economy and outlined an agenda for what’s next to increase competition.
- On December 16, 2022, at a hearing of the Senate Banking, Housing, and Urban Affairs Committee, Senator Warren asked Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra about the CFPB’s achievements over the last year to hold big banks and giant corporations accountable and put money back in working families’ pockets
Next Article Previous Article