CFPB Issues Report on Credit Card Late Fees

The CFPB has issued a report titled “Credit card late fees” that discusses the consumer impact of late fees by card type, credit score, and geography, and market reliance on late fees.  (Late fees are also among the fees at which the CFPB has taken aim in its “junk fees” initiative.)  Following a pattern established under former Director Cordray, the CFPB used relatively neutral language in its report and more judgmental language in Director Chopra’s comments contained in the Bureau’s press release.

Director Chopra commented as follows:

"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 true cost.  Given their current practices, we expect that credit card issuers will hike fees, based on inflation, as limits continue to rise."

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