Billions are on the line for lenders as White House finalizes credit card late fee cap

 Billions are on the line for lenders as White House finalizes credit card late fee cap

Late fees upward of $41 “are significantly higher than the pre-charge-off collection costs” cited by an unnamed credit union trade group, per the NPRM.

Instead, the $8 fee cap shows the CFPB “dug down, did their research, looked at industry data and came out with a number that they thought best reflected a bank’s ability to recover the cost associated with a late payment,” said Shahid Naeem, senior policy analyst at AELP.

“The fact that the CFPB has determined that $8 is sufficient to cover the costs and banks are charging $41, that’s significant,” said Christine Hines, a legislative director for the National Association of Consumer Advocates. “And it shows that somewhere, there’s conduct that needs to be curbed. Clearly.”

CFPB Director Rohit Chopra told senators last month that banks should support the proposal “if it’s not a core part of their profit model.”