House Committee Passes Resolution Blocking CFPB's $8 Fee Cap on Late Card Payments

04/17/2024 08:40 pm

WASHINGTON–The House Financial Services Committee has approved resolution H.J. Res 122, which blocks CFPB's new rule capping credit card late fees at $8. The rule was which slated to go into effect May 14. The committee voted along party lines, with the Republican majority carrying the 28-22 vote.

The resolution will now go to the House Floor, where it is also expected to pass it, again most likely along party lines.  

The Senate, which also has an identical resolution, presents a difficult but possible next step, as this kind of resolution only requires a simple majority, according to Washington observers.

If it passes the Senate it will then go to President Biden, who will either veto it directly or simply refuse to sign it. Consumer groups have strongly backed the $8 cap; financial institutions, including credit unions, have opposed it.

Fought the Good Fight

“Credit unions fought the good fight on this and will likely continue to—the overwhelming sentiment in the industry is that this rule is a case of CFPB overreach,” said John McKechnie, who advocates for credit unions in Washington. “Unfortunately, we are swimming upstream against an Administration that calls any fee charged by a business a junk fee.  It’s hard to see President Biden letting this regulation be overturned by Congress.”