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).