Trade Groups Seek More Time to Comment on CFPB's Proposed Credit Card Fee Cuts

The financial services industry is seeking additional time to study and comment on the Consumer Financial Protection Bureau’s credit card late fee proposal.

A number of banking trade groups, including the Credit Union National Association and the National Association of Federally-Insured Credit Unions, asked CFPB Director Rohit Chopra in a letter this week for a 60-day extension until June 3, or until 90 days after the proposed rule is published in the Federal Register, whichever is later.

“CFPB makes much of its claim to being a data-driven, evidence-based regulator, so the additional time to compile data and thoroughly analyze the impact of CFPB’s proposal is justified and would serve the agency’s own interests, as well,” said Virginia Credit Union League President/CEO Carrie Hunt. “Your League will comment on the proposal and we are eager to hear from member credit unions about how it could affect your members and your organization.”

“This additional time also seems reasonable considering the CFPB did not convene a small business review panel before issuing the proposed rule,” noted Hunt. “The legitimate concerns of credit unions deserve to be heard and opting against the panel stripped us of an important forum for open discussion. Given that, the additional time to better analyze the proposed rule’s impact seems all-the-more necessary.”

The CFPB on Feb. 1 proposed slashing the immunity provision for late fees to $8 for a missed payment and ending the automatic annual inflation adjustment. The proposal also seeks to ban late fee amounts above 25% of the consumer's required payments. The proposed rule is estimated to reduce late fees by about $9 billion per year. The proposed $8 late fee cap represents a drastic reduction from the current safe harbor late fee of $30 and the subsequent late payment safe harbor fee of $41. The $8 fee proposal would apply to any missed payment, both initial and subsequent.

Want to share your thoughts on this proposed rule? Reach out to League Chief Advocacy Officer JT Blau.