U.S. judge rejects rule capping credit card late fees at $8
A federal judge in Texas declined to revive a new regulation that would cap credit card late fees at $8 after business lobbyists and banks protested the policy as unconstitutional. The regulation would prevent card issuers with more than one million users from charging more than $8 for late fees unless they could prove to the Consumer Financial Protection Bureau that they needed the money to cover costs. But when the cap was proposed, numerous groups moved swiftly to sue the government, including the U.S. Chamber of Commerce — arguing that sizable late fees were necessary for deterring late payments and ensuring that no “raised costs” fell on credit card users. The late fee cap policy was part of the Biden administration's crackdown on “junk fees,” which included other regulations such as requiring resorts and music services to disclose all fees upfront, mandating airline ticket refunds in case of major delays and requiring all companies to make it as easy to cancel a service as it was to sign up.
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