“A bill to amend the Truth in Lending Act to reduce excessive credit card late fees, and for other purposes.”
No CRS summary available for this bill.
This section declares Congress's intent to codify the Consumer Financial Protection Bureau's late fees rule under Regulation Z (12 CFR part 1026), affirming its appropriate promulgation under the bureau's preexisting authority and limiting such fees to amounts reasonable and proportional to credit card issuers' costs.
This section (1) limits the Bureau of Consumer Financial Protection's (CFPB) considerations under subsection (c) for rules on reasonable credit card penalty fees to only the cost incurred by the creditor from the omission or violation (from four factors, including deterrence of the violation, cardholder conduct, and other appropriate factors), and (2) establishes in new subsection (f) a cap of $8 on late fees assessed by large credit card issuers (i.e., those with 1 million or more open accounts in the preceding calendar year), provided the fee does not exceed the issuer's total costs and contribute to profits. The CFPB may increase the $8 cap based on changes in the Consumer Price Index for All Urban Consumers; challenges must be filed in the U.S. District Court for the District of Columbia; and CFPB rulemaking follows the Administrative Procedure Act with prior public release of supporting research. (As background, 15 U.S.C. 1665d generally requires credit card penalty fees, such as late and over-limit fees, to be reasonable and proportional to the violation.)