Consumer Bureau Taking on Credit Card Late Fees
Rohit Chopra waging war on “junk fees”
The Consumer Financial Protection Bureau (CFPB) is moving to reduce or eliminate so-called “junk fees” in the banking and credit card space.
Jason Mikula in Fintech Business Weekly reports on the most recent move by the CFPB to take on credit card fees:
“. . . the CFPB is now taking aim at credit card penalty fees, which the consumer protection agency says cost consumers some $12 billion per year. Late fees make up 10% of the total cost of credit cards to customers, according to the bureau.
The fees are also disproportionately paid by lower-income and subprime card holders.”
CFPB Director Rohit Chopra has made clear his disdain for such fees and has stated a desire to see these fees significantly reined-in:
“Many credit card issuers have made late fee penalties a core part of their profit model. Markets work best when companies compete on price and service, rather than relying on back-end fees that obscure the…
