Washington, D.C. — In response to the Consumer Financial Protection Bureau’s new proposed rule to rein in excessive credit card late fees, the American Economic Liberties Project released the following statement.

“Today, the CFPB is standing up to the credit card cartel in order to save Americans $9 billion per year,” said Shahid Naeem, Policy Analyst at the American Economic Liberties Project. “For too long, credit card companies have cashed in on evading the 2009 CARD Act, turning huge profits by slapping consumers with unreasonable and disproportionate fees that often charge up to five times the costs associated with collecting late payments. The CFPB’s fight against rip-off junk fees is a clear demonstration of the ways strong regulators can protect Americans from the corporate giants taking advantage of them.”

The CFPB found earlier this year that credit card late fees are not a meaningful incentive for cardholders to make on-time payments and effectively punish American families for living paycheck-to-paycheck. The CFPB also found that these fees disproportionately target low-income and Black Americans. The CFPB’s proposed rule would cap late fees at $8 per payment instead of the current $30 for an initial late payment and $41 for subsequent late payments, and would also prevent credit card companies from charging above 25% of a cardholder’s minimum payment in late fees.

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.