WASHINGTON (AP) — The Consumer Financial Protection Bureau is preparing to reopen its examination of credit card late fees, signaling that the agency may once again consider regulatory action on a contentious issue that has been the subject of years of litigation and industry debate.
According to a filing on the federal government’s regulatory agenda, the CFPB is preparing a request for information (RFI) on credit card late fees and late payments that is currently under review by the White House’s Office of Information and Regulatory Affairs (OIRA), the office responsible for reviewing significant federal regulatory actions before they are released publicly. The regulatory agenda identifies the effort as a “prerule” action under the Dodd-Frank Wall Street Reform and Consumer Protection Act. The CFPB has not yet released a draft of the request for information. The development was first reported by Law360.
The CFPB’s regulatory agenda indicates the Bureau intends to solicit public input before determining whether additional regulatory action is warranted. The agency has not announced a timetable for issuing the request for information.
Two Years After Proposed Cap of $8
The move comes more than two years after the CFPB finalized a rule under the Biden administration that would have reduced the safe-harbor amount for most credit card late fees charged by large card issuers to $8. The rule applied to issuers with more than one million open credit card accounts and was intended to reduce what the bureau at the time described as excessive penalty fees.
That regulation never took effect after banking and business groups challenged it in federal court, arguing the CFPB had exceeded its authority under the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009. The litigation ultimately prevented implementation of the rule, and the CFPB later withdrew its defense of the regulation.
The new “prerule” action suggests the bureau is taking a different approach by first gathering information from consumers, financial institutions and other stakeholders before deciding whether to pursue another rulemaking.
