Credit Card Fairness Act
Congress Proposes $8 Limit on Credit Card Late Fees for Large Banks
Legislative Progress
Key Points
- This bill would limit how much big credit card companies can charge you if you miss a payment deadline. It targets large banks that have 1 million or more open accounts.
- Under this plan, the maximum late fee a large credit card company could charge would be $8. Currently, many companies charge significantly more, often between $30 and $40.
- The policy requires that late fees only cover the actual cost the bank pays to handle a late payment. This prevents companies from using these fees as a way to increase their overall profits.
- The government would be allowed to raise the $8 limit in the future, but only to keep up with the rising cost of living. Any increase would be tied to the official inflation rate.
- Before any new rules are made about these fees, the government must publicly release the research and data used to justify the changes. This is intended to make the process more transparent for consumers.
Impact Analysis
Personal Impact
Life & Work
Small business owners who hold credit cards from large issuers would save money on late fees if they occasionally miss a payment. However, the bill only applies to large credit card issuers with 1 million or more open accounts, so small business cards from smaller banks wouldn't be affected. Some analysts worry that banks could offset lost late-fee revenue by raising interest rates or cutting rewards programs, which could affect small business cardholders.
Disabilities
Broader Impacts
Milestones
Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
Sent to a congressional committee for expert review. The committee decides whether this bill moves forward.
Introduced in Senate
The bill was officially filed and given a number. It now enters the legislative queue.
Votes
No votes have been recorded for this legislation yet.
Related News
5 articlesDemocratic Sens. Fetterman, Booker and Baldwin introduce legislation to cap credit card late fees at $8
Democratic Sens. John Fetterman (Pa.), Cory Booker (N.J.) and Tammy Baldwin (Wis.) introduced the Credit Card Fairness Act on Thursday. The bill aims to codify a 2024 CFPB rule that reduced the typical late fee from $32 to $8 for banks with over 1 million accounts.
Democratic senators introduce bill to lower credit card late fee cap
Sens. John Fetterman, Cory Booker, and Tammy Baldwin introduced the Credit Card Fairness Act to lower the late fee safe harbor to $8. The bill seeks to provide a statutory basis for a cap previously struck down in court and directs future challenges to the D.C. Circuit Court.
Bill would renew Biden caps on credit card late fees
New legislation aims to cap credit card late fees at $8, promoting affordability. The Credit Card Fairness Act would codify the cap in law, which supporters say will save over $200 a year on average for the more than 45 million people who are charged late fees.
Source Information
Document Type
Congressional Bill
Official Title
Credit Card Fairness Act
Data Sources
Sponsor
Cosponsors
(5)Analysis generated by AI. Always verify with official sources.