The Biden administration, through the Consumer Financial Protection Bureau (CFPB), has introduced a rule to cap credit card late fees at $8, significantly lower than the current $32 average. This action is a key part of the administration’s campaign against so-called “junk fees,” projected to save consumers around $10 billion annually. Banks must now justify any late fee over $8.
The initiative responds to President Joe Biden’s pledge to combat unfair fees, which are estimated to cost consumers $90 billion a year. This effort aims to challenge the dominance of a few major players in the financial sector and alleviate the burden of additional charges on consumers.
Additionally, a new “strike force” will target illegal and unfair pricing in essential services, part of a broader strategy to tackle high inflation and rising living costs. Despite these measures, approval ratings for Biden’s economic policies remain low.
The move comes amid record-high credit card debt in the U.S., with increasing delinquency rates. It builds on previous legislation aimed at curbing excessive fees and ensuring transparency in the credit industry.
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