Consumer Financial Protection Bureau Aims To Amend Regulations On Credit Card Late Fees
Credit card debt is one of the most frequently cited sources of financial hardship among consumers who file for bankruptcy protection or seek the services of debt lawyers. Low-paying jobs and gigs with little or no paid leave or employer-provided health insurance are the norm; meanwhile, most of life’s necessities are expensive, from housing to healthcare to utilities, gasoline, and groceries. This was the situation three years ago, and the COVID-19 pandemic and near record-high inflation have only made it worse. Most people’s credit card debt is a symptom, rather than a root cause, of financial hardship. Big spenders who swipe the plastic at high-end stores to impress people certainly exist, and some of them do it to make themselves feel less insecure, anxious, or lonely, but more than half of all American adults have credit card debt, and most of them have it for reasons other than the fact that keeping up with the Joneses enables them to avoid facing the person in the mirror. The trouble with credit cards is that any purchase you make with a credit card ends up being much more expensive than if you had paid for it with funds from your checking account. A Miami debt lawyer can help you pay off, renegotiate, consolidate, or settle your credit card debt.
Does a New Financial Crisis Mean New Credit Card Late Fee Regulations?
In the wake of the 2008 financial crisis, the federal government enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. One of the provisions of this law was the creation of the Consumer Financial Protection Bureau (CFPB). One of the first protections the CFPB implemented was limiting the amounts of the fees that credit cards could charge for late payments. (Bear in mind that fees are not the only way that credit card companies make money; they also charge interest on purchases.) The CFPB stated that credit card late fees must be reasonable, but that the CFPB would periodically amend the maximum allowable amounts to keep up with inflation.
To avoid risking an investigation by the CFPB, credit card companies can issue late fees of up to $30 for a late payment, or up to $41 for the second late payment in a six-month period. Given that inflation has spiked over the past year, this would mean a major increase in the maximum allowable late fees. CFPB director Rohit Chopra has announced that he does not intend to increase credit card late fees in proportion to the increase in the prices of groceries, gasoline, and everything else that is causing Americans to reach for the plastic. Instead, the CFPB is studying the issue and will later release a statement on what it considers a reasonable amount for credit card late fees.
Contact a South Florida Debt Lawyer About Coping With Credit Card Debt
A South Florida debt lawyer can help you find the best strategy for making a dent in your credit card debt. Contact Nowack & Olson, PLLC in Miami, Florida to discuss your case.