As part of his administration’s effort to crack down on “junk fees,” President Joe Biden announced a new law on Tuesday that caps credit card late fees to just $8—and, now, six trade groups have sued the Consumer Financial Protection Bureau over it.
The groups—comprising the U.S. Chamber of Commerce, Consumer Banking Association, American Bankers Association and three Texas business associations—claim that the new rule oversteps the CFPB’s authority and would eventually lead to more late payments, higher debt, lower credit scores and reduced access to credit for consumers. The CFPB, on the other hand, said the cap would save each American an average of $200 per year.
“By significantly limiting late fees, the CFPB is not only discouraging responsible credit card use but also imposing higher costs on consumers and limiting choices in credit card options and benefits,” said Neil Bradley, executive vice president, chief policy officer and head of strategic advocacy at the Chamber of Commerce.
