WASHINGTON, D.C. – U.S. Senator Tammy Baldwin (D-WI) led her colleagues in introducing the Credit Card Fairness Act, legislation that would cap credit card late fees at $8.
Consumers currently pay $14 billion per year in credit card late fees, which pads the profits of the biggest banks. The standard $30 to $41 late fee is up to five times higher than the cost for banks of collecting late payments, allowing banks to profit from customers who are struggling to make ends meet.
“As costs continue to skyrocket under this administration — from groceries, to housing, to health care — Wisconsin families are already stretched thin. The last thing they need is big banks and credit card companies gouging them with credit card late fees that make it harder to stay afloat, let alone get ahead,” said Senator Baldwin. “Our bill will crack down on big banks, cap late fees at $8, and give families a little breathing room.”
“Big banks profiteering off people by charging $41 for a single late credit card payment is absolutely wrong,” said Senator Fetterman. “At a time when people are struggling to get by, these late fees are only doing more harm. This legislation will protect hardworking Americans from predatory fees, and I’ll work with anyone to get this over the finish line.”
“American consumers shouldn’t be hit with predatory late fees that are three to five times higher than the actual cost of collection,” said Senator Booker. “This legislation keeps money in the pockets of working families by putting a clear cap on credit card late fees and cracking down on banks that make billions of dollars of profit each year on the backs of their customers.”
The Consumer Financial Protection Bureau previously enacted a rule that capped these fees at $8, which was stalled in litigation brought by the big banks. This legislation would codify the $8 cap in law.
The Credit Card Fairness Act is endorsed by Americans for Financial Reform, the Consumer Federation of America, Groundwork Collaborative, the National Consumer Law Center (on behalf of its low-income clients), Public Citizen, and Protect Borrowers.
A summary of the bill text is available here.
The full bill text is available here.
An online version of this release is available here.
