May 3 is comment deadline for CFPB credit card late-fee proposal

A proposal issued Feb. 1 aimed at better ensuring that late fees charged on credit card accounts are “reasonable and proportional” – for example, capped at $8 for late credit card payments – has a public comment deadline of May 3, according to a Federal Register notice Wednesday.

Briefly, the proposed rule would:

  • adjust the safe harbor dollar amount for late fees to $8 and eliminate a higher safe harbor dollar amount for late fees for subsequent violations of the same type;
  • provide that the current provision that provides for annual inflation adjustments for the safe harbor dollar amounts would not apply to the late fee safe harbor amount; and
  • provide that late fee amounts must not exceed 25 percent of the required payment.

The proposed rule would revise Regulation Z, which implements the Truth in Lending Act (TILA).

Federal Register notice