Washington, D.C. — In response to the release of a final rule from the Consumer Financial Protection Bureau banning excessive credit card late fees and capping the typical fee at $8—down from the current $32-$41—the American Economic Liberties Project released the following statement.

“The CFPB just delivered a monumental win to working families by ending the credit card late fee frenzy and putting $10 billion annually back in consumers’ pockets,” said Morgan Harper, Director of Policy and Advocacy at the American Economic Liberties Project. “For years, the biggest credit card companies have abused legal loopholes to charge exorbitant late fees, which disproportionately harm the most vulnerable. By capping late fees at one fifth of the current highest penalty, the CFPB is disrupting a major revenue stream built on cheating consumers—and honoring the original spirit of the 2009 CARD Act. We’re thrilled to see the CFPB put an end to these exploitative practices and take yet another bold action to protect working families from being swindled by big corporations.”

As credit card debt balloons across the country, the CFPB’s final rule will save working families more than $10 billion a year by drastically lowering fees charged for late credit card payments to $8, down from as high as $41. The CFPB rule returns the charges to a level reflecting the 2009 Card Act’s mandate that they be “reasonable and proportional” to actual business costs.

Late fees are now the most significant credit card fee Americans face in both dollar amount and frequency, costing Americans $14.5 billion in 2022 alone. These junk fees disproportionately affect low-income Americans: in 2019, credit card accounts with credit scores 580 or below paid over 10x more on average in late fees than accounts with scores 720 or higher, and just 12% of credit card accounts paid 42% of total late fees charged. The CFPB has found that these fees effectively punish American families for living paycheck-to-paycheck.

Read “Closing the Late Fee Loophole” to learn more.

Learn more about Economic Liberties here.

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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.