Sponsors (6)
The bill limits and grounds credit card late fees to protect consumers and increase CFPB transparency, but risks shifting costs to other fees/rates, creating uneven coverage, and prompting legal and operational responses that reduce or complicate the intended consumer benefit.
Low- and middle-income credit cardholders will pay substantially lower maximum late fees (e.g., an $8 cap indexable to CPI-U and fees limited to reasonable/documented issuer costs), reducing immediate out-of-pocket penalty costs.
Consumers gain stronger protections against abusive or profit-driven late fees because the CFPB must ensure fees reflect a creditor's documented costs rather than being set for profit.
The bill increases regulatory transparency and legal clarity by codifying the CFPB approach and requiring publication of research supporting any fee rule before notice-and-comment, helping issuers and consumers understand the standards.
Credit card issuers (especially large ones) are likely to raise other fees or interest rates to recoup lost late-fee revenue, which could increase costs for many cardholders.
Smaller late-fee penalties may weaken incentives for some cardholders to pay on time, potentially increasing delinquencies and related credit risks.
Issuers with under 1,000,000 accounts are exempt, creating inconsistent protections and potentially unequal fee burdens for consumers depending on their card issuer.
Based on analysis of 3 sections of legislative text.
Makes a statutory cap on late fees for large credit card issuers ($8, CPI‑U adjustable), requires cost‑based fees and APA rulemaking with public research disclosure.
Official title: Amend the Truth in Lending Act to reduce excessive credit card late fees, and for other purposes.
Introduced January 15, 2026 by John Karl Fetterman · Last progress January 15, 2026
Codifies a Consumer Financial Protection Bureau (CFPB) rule that limits credit card late fees by law, making the ceiling $8 for large credit card issuers (those with 1,000,000+ open accounts) with future adjustments tied to CPI‑U inflation changes. It requires the CFPB to ensure late fees reflect only costs (not profit), to follow formal APA notice-and-comment rulemaking with public research disclosure, and designates the U.S. District Court for the District of Columbia as the exclusive venue for legal challenges to this provision.