The American Bankers Association and four bank and credit union associations this week expressed support for two resolutions to overturn the Consumer Financial Protection Bureau’s final rule on credit card late fees. Senate Joint Resolution 70 and House Joint Resolution 122 would overturn the rule if passed by both houses of Congress and signed by the president. In letters to Senate and House lawmakers, the associations said the rule to reduce the safe harbor amount for credit card late fees will create long-term harm for the minority of consumers the CFPB purports to help.
“The CFPB’s final rule would, by definition, make it easier for consumers to miss their credit card payments,” the associations said. “As more consumers pay late, there is a higher chance they will become delinquent. Ultimately, consumers experiencing delinquency will have this information reported to credit bureaus, leading to higher credit card balances carried month-to-month and lower credit scores, which can lead to far worse outcomes for consumers such as difficulty obtaining credit, or higher financing costs for housing, cars, and other necessary purchases.”
