(FixThisNation.com) – The Biden administration has imposed a new rule that sets a credit card late fee ceiling of $8. Banking and credit card companies have now begun to adapt as a result of this rule.
Rob Nichols, the CEO and President of American Bankers Association noted in a press release to Fox News Digital that the ruling was flawed as it would reduce competition while driving up the credit cost. He added that this new decision was just going to lead to higher debt, worst credit scores, and even more late payments while making it harder for those who require credit access to gain it.
He proceeded to say that this rule shouldn’t go into effect.
The Consumer Financial Protection Bureau (CFPB) finalized the new rule which is going to set a $8 cap on all credit card late fees. This is going to be applied to all of the large credit card issuers across the United States and will affect over 1 million open accounts. It is estimated that this new regulation is going to allow American families to save over $10 billion in late fees annually as previously the typical late fee was around $32. This would mean that the average saving per individual could be around $220 annually for the 45 million people who are usually charged late fees.
The crackdown on late fees is part of a wider initiative by the Biden administration to reduce what they are referring to as junk fees. These are hidden subcharges that consumers will often be made to pay in several different transactions, including hotel rooms, loans, and credit cards.
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