Regulator proposes capping credit card late fees at $8, latest in Biden campaign against ‘junk fees’

NEW YORK (AP) — The Biden administration announced a rule Tuesday to cap all credit card late fees, the latest effort in the White House push to end what it has called “junk fees” and a move that regulators say will save Americans up to $10 billion a year.

The Consumer Financial Protection Bureau’s new regulations will set a ceiling of $8 for most credit card late fees, or require banks to show why they should charge more than $8 for such a fee.

The rule would bring the average credit card late fee down from $32. The bureau estimates banks brought in roughly $14 billion in credit card late fees a year.

“In credit cards, like so many corners of the economy today, consumers are beset by junk fees and forced to navigate a market dominated by relatively few, powerful players who control the market,” said Rohit Chopra, director of the bureau, in a statement.

President Joe Biden planned to highlight the proposal along with other efforts to reduce costs to Americans at a meeting of his competition council on Tuesday. Biden is forming a new “strike force” to crack down on illegal and unfair pricing on things like groceries, prescription drugs, health care, housing and financial services.

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