CFPB Revives Credit Card Late-Fee Rulemaking With New Inquiry

The Consumer Financial Protection Bureau has filed a request for information on credit card late fees and late payments. The document sits at the prerule stage on OIRA's regulatory dashboard, meaning a formal proposal is not yet public.

Ballard Spahr, the law firm that flagged the filing Wednesday, called the request the first official step toward a potential rule. The CFPB already tried this before. In March 2024 it issued a final rule that would have capped late fees and saved consumers an estimated $10 billion a year. Banking trade associations sued, a court blocked the rule, and the CFPB stopped defending it after the change in administration. The old cap never took effect.

Ballard Spahr listed three reasons the CFPB might be gathering fresh data. It could need an updated factual record since the 2022 advanced notice that led to the 2024 rule. It could be designing a different regulatory approach that sidesteps the legal objections that killed the first cap. Or it could be responding to broader concerns about consumer credit affordability. The firm stressed that the request does not guarantee a new late-fee rule will follow.

For banks with large credit card portfolios – JPMorgan Chase, Citigroup, Bank of America, Capital One – late-fee revenue runs into the hundreds of millions annually. A renewed cap would cut directly into that line item. The industry's first lawsuit succeeded in part because judges found the CFPB exceeded its statutory authority. Any new rule would have to thread a narrower legal needle.

Timeline is unclear. The prerule stage can stretch months or years, and the CFPB has not signaled a target date. The request has not been published, so the scope of the inquiry is unknown.

What would reduce the risk for card issuers: a rule that targets only the largest issuers or limits itself to data collection without a hard cap. What would make it worse: a fast-tracked proposal that reproduces the $8 safe-harbor cap from the 2024 rule with minor adjustments, inviting another legal fight.

Ballard Spahr said the decision to revisit late fees, even after abandoning the 2024 rule, keeps the topic on the agency's docket. "The Bureau's decision to revisit the subject suggests that regulation of late-payment practices remains on the agency's docket," the firm wrote, "even though it doesn't appear on the agency's recent regulatory agenda."

Banking groups sued over the original cap on grounds that the CFPB ignored Congress's intent that fees be high enough to deter late payments and cover issuer costs. That argument remains live. A new data-collection effort could either strengthen or undermine it, depending on what the CFPB finds.