ICBA expressed support for Rep. Andy Barr’s (R-Ky.) introduction of a resolution to nullify the Consumer Financial Protection Bureau’s final rule to cut credit card late fees.
Barr Resolution: If passed by Congress, the Congressional Review Act resolution would express congressional disapproval of the rule and nullify its implementation. Senate Banking Committee Ranking Member Tim Scott (R-S.C.) has also said he would fight the rule via the Congressional Review Act.
ICBA Letter: In a letter to Barr, ICBA said the rule, which includes an exemption for community banks, is part of a broader effort to mischaracterize legitimate practices as “junk fees” and would carry unintended consequences for American consumers.
Rule Details: The CFPB rule:
Cuts the credit card late fee safe harbor under the CARD Act from the current levels of $30 for the first violation and $41 for subsequent violations to $8, without inflation adjustments.
Applies to issuers with 1 million or more open accounts, which allows the CFPB to avoid analyzing the rule under the Small Business Regulatory Enforcement Fairness Act.
Allows covered issuers to charge fees above the threshold as long as they can prove the higher fee is necessary to cover their collection costs.
ICBA Response: In a national news release after the rule’s release, ICBA said the rule sends the wrong message that punctual credit card payments are not a significant priority, which will harm consumers by leading to more late payments and additional interest charges.
