Biden slashing credit card late fees to $8 in latest crackdown on junk fees

Published

1 year ago

March 7, 2024

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The Biden administration announced a rule Tuesday to cap all credit card late fees, the latest effort in the White House push to end what it has called junk fees and a move that regulators say will save Americans up to $10 billion a year.

The Consumer Financial Protection Bureaus new regulations will set a ceiling of $8 for most credit card late fees or require banks to show why they should charge more than $8 for such a fee.

The rule would bring the average credit card late fee down from $32.

The bureau estimates banks brought in roughly $14 billion in credit card late fees a year.

In credit cards, like so many corners of the economy today, consumers are beset by junk fees and forced to navigate a market dominated by relatively few, powerful players who control the market, said Rohit Chopra, director of the bureau, in a statement.

President Biden planned to highlight the proposal along with other efforts to reduce costs to Americans at a meeting of his competition council on Tuesday.

The Democratic president is forming a new strike force to crack down on illegal and unfair pricing on things like groceries, prescription drugs, health care, housing and financial services.

The strike force will be led by the Justice Department and the Federal Trade Commission, according to a White House statement.

The Biden administration has portrayed the White House Competition Council as a way to save people money and promote greater competition within the US economy.

The White House Council of Economic Advisers produced an analysis indicating that the Biden administrations efforts overall will eliminate $20 billion in annual junk fees.

The analysis found that consumers pay about $90 billion a year in junk fees, including for concerts, apartment rentals and auto dealers.

The effort appears to have done little to help Biden politically ahead of this years presidential election.

Just 34% of US adults approve of Bidens economic leadership, according to a new survey by The Associated Press-NORC Center for Public Affairs Research.

Sen. Tim Scott, R-South Carolina, criticized the CFPB cap on credit card late fees, saying that consumers would ultimately face greater costs through higher interest rates and less access to credit.

It will decrease the availability of credit card products for those who need it most, raise rates for many borrowers who carry a balance but pay on time, and increase the likelihood of late payments across the board, Scott said.

Americans held more than $1.05 trillion on their credit cards in the third quarter of 2023, a record, and a figure certain to grow once thefourth-quarter datais released by the Federal Deposit Insurance Corp. next month.

Those balances are now carrying interest on them, which is the highest it has been since the Federal Reserve started tracking the data back in the mid-1990s.

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Further, more Americans are falling behind on theircredit card debtsas well.

Delinquency ratesat the major credit card issuers such as American Express, JPMorgan Chase, Citigroup, Capital One and Discover have been trending upward for several quarters.

Some analysts have become concerned Americans, particularly poorer households hurt by inflation, might be taking on too much debt.

Overall, the consumer is credit healthy. However, the reality is that there are starting to be some significant signs of stress, said Silvio Tavares, president and CEO of VantageScore, one of the countrys two major credit scoring systems, in an interview last month.

The growth of the credit card industry is partly whyCapital One announced it would buy Discover Financiallast month for $35 billion.

The two companies, which are two of the largest credit card issuers, are also two companies whose customers regularly carry a balance on their accounts.

This is not the first time policymakers have weighed in on credit card fees.

Congress in 2010 passed the CARD Act, which banned credit card companies from charging excessive penalty fees and established clearer disclosures and consumer protections.

The Federal Reserve issued a rule in 2010 that capped the first credit card late fee at $25, and $35 for subsequent late payments, and tied that fee to inflation.

The CFPB, which took over the regulation of the credit card industry from the Fed after it was established, is proposing going further than the Fed.

The bureaus proposal is similar in structure to what the bureau announced in January when it proposedcapping overdraft feesto as little as $3.

In that proposed regulation, banks would be required to either accept the bureaus benchmark or show regulators why they should charge more, a method that few bank industry executives expect to use.

Biden has madethe elimination of junk feesone of the cornerstones of his administrations economic agenda heading into the 2024 election.

Fees that banks charge customers have been at the center of that campaign, and the White House directed government regulators last year to do whatever is in their power to further curtail the practice.

In another move being highlighted by the White House, the Agriculture Department said it has finalized a rule to stop what it deems to be deceptive contracts by meat processors and to ban retaliation against small farmers and ranchers that work together in associations.

Politics

Bhutan should embrace decentralized identity systems

Published

2 hours ago

July 17, 2025

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Bhutan should embrace decentralized identity systems

Bhutan’s unique naming culture and values of sovereignty make it a strong candidate for adopting blockchain-based identity systems.

World

Pope ‘deeply saddened’ by deaths at sole Catholic church in Gaza after Israeli strike

Published

2 hours ago

July 17, 2025

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Pope 'deeply saddened' by deaths at sole Catholic church in Gaza after Israeli strike

The Pope has said he is “deeply saddened” by the deaths of three people in an Israeli strike on the only Catholic church in Gaza.

A further nine people were wounded when the Gaza’s Holy Family Church was hit, the Latin Patriarchate of Jerusalem said in a statement.

“On behalf of the entire Church of the Holy Land, we extend our deepest condolences to the bereaved families, and from here, we offer our prayers for the swift and full recovery of the wounded,” the statement reads.

“The Latin Patriarchate strongly condemns this tragedy and this targeting of innocent civilians and of a sacred place.

“However, this tragedy is not greater or more terrible than the many others that have befallen Gaza.”

Parish priest Father Gabriele Romanelli, an Argentinian who used to regularly update the late Pope Francis about the conflict in Gaza, was lightly injured in the attack.

In a telegram for the victims, Pope Leo said he was “deeply saddened” and called for “an immediate ceasefire”.

The Pope expressed his “profound hope for dialogue, reconciliation and enduring peace in the region,” according to the telegram, which was signed by the Vatican Secretary of State Cardinal Pietro Parolin.

Cardinal Pierbattista Pizzaballa, the Latin Patriarch of Jerusalem, told the Vatican News website that the church was shelled by a tank.

“What we know for sure is that a tank, the IDF says by mistake, but we are not sure about this, they hit the Church directly, the Church of the Holy Family, the Latin Church”, he said

The church was sheltering both Christians and Muslims, including a number of children with disabilities, according to Fadel Naem, acting director of Al-Ahli Hospital, which received the wounded.

The Israel Defence Forces (IDF) said it was “aware of reports regarding damage caused to the Holy Family Church in Gaza City and casualties at the scene. The circumstances of the incident are under review”.

“The IDF makes every feasible effort to mitigate harm to civilians and civilian structures, including religious sites,
and regrets any damage caused to them,” the statement added.

Israel’s foreign ministry said in a statement on X that the results of the investigation would be published.

It also said the country did not target churches or religious sites and regretted harm to them or civilians.

The previous pope, Francis, spoke almost daily with Gaza church. In the last 18 months of his life, Francis would often call the church in the Gaza Strip to see how people huddled inside were coping with a devastating war.

At least 20 more people were killed on Thursday by Israeli attacks across the besieged enclave, medics said.

Throughout the 21-month war, more than 58,000 Palestinians have been killed by Israel’s military campaign, according to Gaza’s health ministry, which does not distinguish between civilians and combatants in its count.

Israel launched a retaliatory campaign against Hamas following the militant group’s 7 October 2023 attacks, during which 1,200 people were killed and about 250 taken hostage.

World

Syria’s president vows to protect Druze population after Israel airstrikes – as new ceasefire begins

Published

2 hours ago

July 17, 2025

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Syria's president vows to protect Druze population after Israel airstrikes - as new ceasefire begins

Syria’s president has said protecting the rights of the Druze population is “our priority” after Israel warned it would destroy forces attacking the minority.

In a televised statement early today, Ahmed al Sharaa told the Druze “we reject any attempt to drag you into hands of an external party”.

Several hundred people have reportedly been killed this week in the south of Syria in violence involving local fighters, government authorities and Bedouin tribes.

Following the president’s announcement and a ceasefire agreement, Syrian government forces on Thursday largely withdrew from the volatile southern province of Sweida.

Under the terms of the agreement, Druze factions and clerics have been appointed to maintain internal security.

As the violence escalated in Sweida, Israel launched airstrikes, including attacks on Wednesday on the defence ministry in Damascus and a target near the presidential palace.

Benjamin Netanyahu’s government has pledged to “act resolutely against any terrorist threat on its borders”.

The Druze population follow an offshoot of Islam and are estimated to number about one million, spread between Syria, Lebanon and Israel.

Sharaa – Syria’s interim leader after President Assad fled last year – gave a televised statement on Wednesday telling the Druze “we reject any attempt to drag you into hands of an external party”.

“We are not among those who fear the war,” he added.

“We have spent our lives facing challenges and defending our people, but we have put the interests of the Syrians before chaos and destruction,” said the president.

He also claimed Israel has “consistently targeted our stability and created discord among us since the fall of the former regime”.

Israel has accused the Syrian regime of being barely disguised jihadists – despite warming ties with Western countries such as the UK and US.

The UK-based Syrian Observatory for Human Rights said, as of Wednesday morning, more than 300 people had been killed in the flare-up of violence.

Around 1,000 Druze people broke through a fence into southern Syria on Wednesday in a bid to help, according to The Times of Israel.

Prime Minister Netanyahu urged people not to cross into Syria and Israeli military chief of staff Eyal Zamir warned they would not “allow southern Syria to become a terror stronghold”.

The UN Security Council will discuss the situation today, despite the US secretary of state saying yesterday that America had brokered an end to the violence.

“We have engaged all the parties involved in the clashes in Syria,” Marco Rubio said on social media.

“We have agreed on specific steps that will bring this troubling and horrifying situation to an end tonight.”