The Consumer Financial Protection Bureau appears ready to take another look at credit card late fees, an issue that most thought was settled when the Biden-era $8 fee cap was vacated last year.
The Bureau has submitted a Request for Information on “Credit Card Late Fees and Late Payments” to the Office of Information and Regulatory Affairs for interagency review. The document itself has not been made public, so it is not yet known what information the Bureau is seeking or where the effort might lead. But an RFI is often the first formal step in a rulemaking process, making the submission notable on its own.
Why it matters: The move is a surprise coming from a Bureau that, under Acting Director Russell Vought, has walked away from defending a long list of Biden-era regulatory initiatives. Late fee revenue is a meaningful component of issuer economics, and any change to the Regulation Z safe harbor framework would ripple through delinquency management, collection strategies, and recovery operations across the industry.
The backstory: The CFPB has been circling this issue since 2022, when it issued an Advance Notice of Proposed Rulemaking probing whether safe harbor amounts allowed issuers to collect fees exceeding their actual costs. That inquiry produced the March 2024 final rule, which would have cut the safe harbor for larger issuers to $8 from $30 for a first violation and $41 for subsequent ones, eliminated annual inflation adjustments, and capped late fees at 25% of the required minimum payment. The Bureau estimated the rule would save consumers roughly $10 billion per year.
Banking trade associations sued, arguing the Bureau exceeded its authority under the CARD Act and had imposed an unlawful price control. The rule never took effect. After the change in administrations, the CFPB stopped defending the rule while the case was on appeal to the Fifth Circuit, and the parties agreed to vacate it as part of a settlement.
What could be driving the new inquiry: Attorneys at Ballard Spahr offer a few possibilities
