The new rule is anticipated to save consumers more than $10 billion per year

Immediate Release
March 5, 2024

Rob Mayo | 909-471-6449

ILLINOIS – Woodstock Institute joins consumer advocates across the country in celebrating the Consumer Financial Protection Bureau’s (CFPB) decision to finalize a rule to significantly reduce credit card late fees. The new rule would cap most late fees at $8 and bans large issuers from increasing fees with the rate of inflation. In 2022, the average late fee for major companies was $32.

The rule amends regulation implementing the Credit Card Accountability Responsibility and Disclosure Act (CARD) Act of 2009, which requires late fees to be “reasonable and proportional” to the costs of handling late fees. Prior to this, credit card companies were exploiting a loophole allowing them to charge as much as $30 and $41 for first late payments and subsequent late payments, respectively. The CFPB estimates that, among the largest issuers, income generated by late fees is about five times greater than the collection costs incurred. 

“Currently, credit card fees are among an array of penalties imposed on those who can least afford to pay them. We applaud the CFPB for taking this vital step to stop credit card companies from profiting off the financial distress of their customers,” said Brent Adams, Senior Vice President of Policy and Advocacy at Woodstock Institute. 

Research shows credit card late fees disproportionately burden lower-income people and people of color. In 2019, consumers in the country’s poorest areas were found to have paid on average twice as much in late fees as those in the most wealthy areas. A report from the Government Accountability Office observed that consumers in majority Black and Latino zip codes are charged higher interest rates with lower credit limits compared to consumers with similar financial characteristics in majority white zip codes.

The new rule is the latest in a series of efforts by the CFPB to lower costs for everyday Americans by reigning in excessive “junk” fees. Other recent actions have included the Bureau proposing a new rule to curb overdraft fees and guidance for halting illegal customer service fees from banks.


Woodstock Institute is a leading policy and research nonprofit that advocates for consumer financial protection and community economic development. Our work seeks to combat structural inequities and to improve the quality of life in lower-income neighborhoods and communities of color. Among our areas of focus are predatory lending, access to banking, debt collection, and municipal fines and fees.