Consumer Financial Protection Bureau targets excessive credit card fees in new rule proposal

WASHINGTON — The national government's user extortion watchdog projected a new rule connected Wednesday to prohibition excessive recognition paper precocious fees, perchance reducing them by arsenic overmuch arsenic $9 cardinal per year.

Congress banned exorbitant recognition paper fees nether the Credit CARD Act successful 2009, but an immunity proviso instituted by the Federal Reserve Board of Governors enabled paper companies to dodge enforcement standards, said Rohit Chopra, manager of the Consumer Financial Protection Bureau.

"Over a decennary ago, Congress banned excessive recognition paper precocious fees, but companies person exploited a regulatory loophole that has allowed them to flight scrutiny for charging an different amerciable junk fee," Chopra said. "Today's projected regularisation seeks to prevention families billions of dollars and guarantee the recognition paper marketplace is just and competitive."

Late fees outgo American families astir $12 billion a twelvemonth successful summation to billions successful interest, the CFPB said. Credit paper issuers that hike fees with ostentation are besides protected by immunity clauses, according to Chopra.

The CFPB regularisation projected Wednesday would little the magnitude consumers tin beryllium for precocious fees nether the immunity proviso to $8 from arsenic overmuch arsenic $41, extremity the automatic yearly ostentation accommodation for the proviso and headdress precocious fees astatine 25% of the minimum outgo owed by the cardholder.

The CFPB volition question nationalist remark connected different imaginable changes, including whether to marque the projected regularisation use to each recognition paper penalties, destruct the immunity proviso altogether, make a 15-day courtesy play for recognition paper holders earlier the appraisal of precocious fees and necessitate recognition paper companies to connection autopay services arsenic a information of immunity provisions.

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