Today, the CFPB issued its final credit card late fee rule.  As we expected, the final rule was released prior to President Biden’s March 7th State of the Union address.  The final rule reduces the late fee safe harbor amount to the proposed $8 amount and eliminates automatic annual inflation adjustments for issuers subject to the reduced safe harbor amount.  The final rule is effective 60 days after publication in the Federal Register.

The reduced safe harbor late fee amount only applies to credit card issuers that have 1 million or more open accounts (who, according to the CFPB, constitute the issuers with 95% of total outstanding credit card balances).  The final rule also adjusts the higher, pre-existing safe harbor late fee amounts that issuers below the 1 million account threshold can continue to charge for a first violation and subsequent violations.

We are currently reviewing the CFPB’s 338-page final rule and will provide a detailed discussion of the final rule, including how it varies from the CFPB’s proposal, in subsequent blog posts.

On March 21, 2024, from 1:00 p.m. to 2:00 p.m. ET, Ballard Spahr will hold a webinar on the final rule.  To register, click here.