Letter to CFPB on the Proposed Rulemaking on Credit Card Penalty Fees

Consumer Financial Protection Bureau
1700 G Street, NW
Washington, DC 20552

Re: Docket No. CFPB–2023–0010, Notice of Proposed Rulemaking, Credit Card Late Fees and Late Payments (Truth in Lending Act/Regulation Z)

Ladies and Gentlemen:

The American Bankers Association (ABA), the Consumer Bankers Association, and the National Association of Federally-Insured Credit Unions (collectively, the Associations) welcome the opportunity to comment on the Consumer Financial Protection Bureau’s (CFPB or Bureau) Notice of Proposed Rulemaking (NPRM or Proposal) regarding credit card late fees and late payments. Specifically, the Bureau is proposing to amend Section 1026.52(b) of Regulation Z (Truth in Lending Act), which implements Section 149 of the Truth in Lending Act (TILA) and requires that credit card penalty fees, including late payment fees (late fees), be “reasonable and proportional to [the] omission or violation.”

In the NPRM, the Bureau has proposed to: (1) lower the safe harbor dollar amount for late fees to $8 and eliminate a higher safe harbor dollar amount for late fees for subsequent violations of the same type; (2) eliminate the annual adjustment for the late fee safe harbor; (3) prohibit issuers from including any collection costs that are incurred after an account is charged off from the costs that can be used for purposes of the Section 1026.52(b)(1)(i) cost calculation; and (4) cap late fee amounts at 25 percent of the required minimum payment. The NPRM also requests information on a wide range of far-reaching restrictions on credit card account terms.

Download the comment letter to read the full text.