Watchdog Group Slams CFPB Rule Capping Credit Card Late Fees

For Immediate Release

Contact: Kara Zupkus, (224)-456-0257

WASHINGTON, D.C. – The Taxpayers Protection Alliance Foundation (TPAF) slammed the Consumer Financial Protection Bureau’s (CFPB) March 5 issuance of a new rule capping credit card late fees to $8, which will ultimately hurt consumers amid an already-ongoing economic downturn.

David Williams, the president of TPAF, issued the following statement:

“Once again, the Consumer Financial Protection Bureau, the government agency specifically created to promulgate regulations with little or no oversight from Congress and the American people, has issued a new regulation that amounts to nothing more than a hidden tax on American consumers. The CFPB is exceeding its statutory authority by issuing this rule, and it should be swiftly declared unconstitutional by a court.  

“First, 82 percent of credit card consumers pay their bills on time. This rule will force consumers who pay on time to subsidize the irresponsible behavior of the 18 percent of consumers who are late. Second, as with other efforts to impose price controls on debit cards, fees will be hiked and access to credit will be tightened in response. Finally, this rule will damage small credit unions and community banks. 

“For all these reasons and more, the Small Business Administration’s Office of Advocacy has sounded off on the proposal stating in part that, ‘the rulemaking may be harmful to consumers, including small businesses, who rely on small depositories, should small depositories decide to exit the credit card market.’

“The CFPB is playing politics to bolster President Biden’s ‘war on junk fees.’ It is not a coincidence that the rule was issued during the week of the State of the Union address, where the President will likely address this issue. Nevertheless, this rule is a regressive tax on consumers and it should be withdrawn or defeated.”

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The Taxpayers Protection Alliance Foundation (TPAF) is a non-profit non-partisan organization dedicated to educating the public through research, investigative reporting, and analysis about the effects of excessive taxation and spending by all levels of government. TPAF educates the public about government transparency and openness in the United States and around the world.