Washington D.C. — Ahead of today’s Senate Banking subcommittee hearing on “Fees and Tactics Impacting Americans’ Wallets,” government watchdog Accountable.US released a new analysis dispelling top myths employed by the credit card industry to excuse hidden and excessive late fees – including claims that lowering these junk fees will somehow have adverse effects on borrowers and that high credit card fees are actually beneficial to consumers.

Big banks and credit card companies have escalated PR and lobbying efforts in defense of late fees after the Consumer Financial Protection Bureau (CFPB) released a proposed rule in February 2023 that would cap most credit card late fees to $8 and end the automatic adjustment of fees to inflation — saving American families $9 billion every year. The CFPB has already received nearly 57,000 comments, mainly in support of the announcement. Meanwhile, the financial services industry flooded the comment period with letters in staunch opposition. 

And despite the fact consumers have already saved a staggering $4.25 billion under the CFPB’s initiative as many big banks chose to preempt the Bureau’s actions by voluntarily revamping their overdraft and non-sufficient fund fee practices, Republicans on the Senate Banking Committee and the House Financial Services Committee have bent over backward to defend junk fees after taking millions of dollars from companies that exploit the practice

Credit card companies will say anything to keep their junk fee scheme going that leaches billions of dollars from American families, like claiming a $35 overdraft fee on a gallon of milk somehow does consumers a favor,” said Liz Zelnick, Director of Accountable.US’ Economic Security & Corporate Power.

“And Republicans in Congress that treat big banks like a campaign cash ATM machine have been more than happy to parrot industry rhetoric in support of excessive and often hidden fees, no matter the cost to their own constituents.”


RHETORIC: Industry groups, such as the Consumer Bankers Association and Independent Community Bankers of America have argued that “junk fees” simply do not exist, calling the CFPB’s rulemaking “misguided.”

RHETORIC: Industry claims that capping late fees at $8 would cause issuers to raise the cost of credit for consumers 

RHETORIC: Industry argues that the CFPB’s credit rule would be “especially” harmful “for the most vulnerable consumers.”  

  •     REALITY: Data collected by the CFPB shows that low-income and Black-majority communities are already the most impacted by high credit card late fees.

RHETORIC: Industry argues that lowering credit card late fees would create fewer incentives for Americans to make payments on time.

RHETORIC: Credit card issuers argue that the new “safe harbor” rule will not allow banks to adequately cover the costs of missed payments by Americans.


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