The White House is moving ahead with a plan to slash credit card late fees.
On Wednesday morning, the Biden administration said the Consumer Financial Protection Bureau (CFPB) will move forward with a proposed rule to reduce typical late fees for missed payments from roughly $30 to $8, saving consumers around $9 billion annually.
Rohit Chopra, head of the CFPB, explained that credit card companies started charging higher fees as a way to rack up profits.
“Historically, credit card companies charge relatively small penalty amounts for missed payments, but once they discovered that these fees could be a source of easy profits, late fees shot up with a surge occurring in the 2000s," he said.
More recently, he added, those fees have risen as high as $41 for a missed payment, with consumers paying a total of $12 billion a year in late fees on top of interest charges.
The administration touted its previous efforts urging banks to end overdraft and bounced check fees, which led to several major banks to change their policies.
In addition, the Department of Commerce’s National Telecommunications and Information Administration (NTIA) plans to release a report on "barriers to competition in the current mobile app store ecosystem," according to a White House brief.
The goal is to level the playing field for app developers, it added.
The administration also used the release to call for a number of consumer protection measures, including:
- banning airline fees for family members to sit with young children
- eliminating exorbitant early termination fees for TV, phone, and internet service
- banning surprise resort and destination fees
- and cracking down on excessive online concert, sporting event, and other entertainment ticket fees
President Joe Biden is set to speak about the agenda later today.
