On April 15, 2025, U.S. District Judge Mark Pittman struck down a Consumer Financial Protection Bureau (CFPB) regulation that aimed to cap credit card late fees at $8. This rule was part of a broader initiative to reduce so-called "junk fees" and lessen the financial burden on consumers.
The regulation targeted major credit card issuers, requiring them to limit late fees unless they could justify higher charges based on actual costs. Previously, late fees averaged around $32.
Judge Pittman ruled that the CFPB's cap conflicted with the Credit Card Accountability and Disclosure Act of 2009. This act permits issuers to impose penalty fees that are reasonable and proportional to the violation. The judge concluded that the $8 cap did not align with these provisions.
Business and banking groups, including the U.S. Chamber of Commerce and the American Bankers Association, supported the challenge, arguing that the cap could unfairly shift costs to consumers who pay on time.
With the rule overturned, credit card companies may continue charging higher late fees, potentially averaging around $32. This decision could affect consumers who miss payment deadlines, leading to increased financial strain.
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