Credit Card Penalty Fees (Regulation Z)
The Consumer Financial Protection Bureau (Bureau) proposes to amend Regulation Z, which implements the Truth in Lending Act (TILA), to better ensure that the late fees charged on credit card accounts are “reasonable and proportional” to the late payment as required under TILA. The proposal would (1) adjust 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) provide that the current provision that provides for annual inflation adjustments for the safe harbor dollar amounts would not apply to the late fee safe harbor amount; and (3) provide that late fee amounts must not exceed 25 percent of the required payment.
Proposed Rule with Request for Public Comment
Unofficial Redline of the 2023 Credit Card Late Fees Proposed Rule
Credit Card Late Fees: Revenue and Collection Costs at Large Bank Holding Companies