NEW CFPB RULE CAPS BANKS’ CREDIT CARD LATE FEES AT $8
The Consumer Financial Protection Bureau unveiled a new rule on Tuesday that it said would cap the typical late fee that banks charge customers at $8 per incident.
By cutting late fees to $8 from an average of around $32, more than 45 million card users would save an average of $220 annually, the CFPB said in a release.
The new rule, long expected after an initial proposal was floated early last year, comes after the agency said it reviewed market data related to the 2009 Card Act. Regulations tied to that law granted card issuers the ability to charge ever-increasing amounts of late fees. [Emphasis added.]
Ugh. So with this ham-handed move to control prices by fiat, the CFPB, is–surprise!–almost surely about to make credit scarcer and more expensive for card borrowers, especially those who, when a crunch hits, often need it the most. Absolute genius, I tell you. P.S. Now that I think of it, restricting the underwriting tools available to lenders who dole out unsecured consumer credit doesn’t strike me as a move that, at the margin, strengthens the overall banking system.
With its new card late-fee rule, the CFPB is set to make things worse
By Thomas K. Brown,
MISBEGOTTEN: Drumroll, please—and let the unintended consequences begin!
Ugh. So with this ham-handed move to control prices by fiat, the CFPB, is–surprise!–almost surely about to make credit scarcer and more expensive for card borrowers, especially those who, when a crunch hits, often need it the most. Absolute genius, I tell you. P.S. Now that I think of it, restricting the underwriting tools available to lenders who dole out unsecured consumer credit doesn’t strike me as a move that, at the margin, strengthens the overall banking system.