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CFPB proposes slashing credit card late fees by 75%

  • / Updated:
  • Staff Report 

In a move geared towards financial consumer protection, the Consumer Financial Protection Bureau (CFPB) is set to propose a significant reduction in credit card late fees by approximately 75%.

If the proposal passes, late fees, which currently average $30 and subsequently rise to $41, will be reduced to a mere $8.

The call for change follows numerous complaints from consumers who’ve been hit with exorbitant fees. One incident from Poughkeepsie spotlighted a man who, due to a hospital stay, was unable to pay a $35 bill but was subsequently slapped with $123 in late fees. Reacting to such situations and aiming to offer better transparency and leniency, the CFPB’s proposal will also mandate banks to issue notifications days before a payment’s due date and provide a grace period of 15 days before imposing a late fee.

A recent Consumer Reports survey revealed that one-fifth of consumers incurred a late fee in the past year.

Categories: New York StateNews