Biden Administration to Propose Rule to Lower Credit-Card Late Fees

President Biden plans to announce Wednesday that his administration is proposing a rule that would limit the late fees credit-card companies can charge, bringing penalties down to $8 from as much as $41 for a missed payment, according to the White House, the Wall Street Journal reported. The rule being put forward by the Consumer Financial Protection Bureau could go into effect as early as 2024, administration officials said, and doesn’t require congressional approval. Biden will announce the proposed late-fee cap and other measures that his administration is advocating to reduce fees when he meets with his Competition Council, a group of cabinet members and other administration officials. The CFPB is making a broad push to crack down on what it describes as problematic fees charged by financial institutions. “Many Americans believe these fees are just plain wrong,” CFPB director Rohit Chopra said Tuesday in a preview of the late-fee proposal. Chopra said the CFPB has the authority to amend the rules under the 2009 Credit Card Accountability Responsibility and Disclosure Act. He said the current rules allow credit-card companies to charge high fees and increase them to account for inflation.