The War on Fees Intensifies: Presidential Strike Force and Industry’s Legal Counterattack

As discussed here, on March 5, 2024 the Consumer Financial Protection Bureau (CFPB or Bureau) finalized its credit card late fee rule (Final Rule). The Final Rule sets a safe harbor amount for late fees at $8 and eliminates the annual inflation adjustments to that safe harbor amount, for larger card issuers. The timing of the Final Rule’s announcement, just days before the State of Union address, did not go unnoticed. President Biden highlighted this development in his speech, emphasizing his administration’s commitment to eliminating so-called hidden fees.

However, the administration’s efforts do not stop at late fees. They are assembling a Strike Force to combat unfair and illegal pricing. Led by the Department of Justice and the Federal Trade Commission, the Strike Force aims to “root out” illegal corporate behavior that raises prices through anti-competitive, unfair, deceptive, or fraudulent business practices.

The industry, however, is not standing idle. The announcement of the Final Rule on credit card late fees sparked immediate reaction. A collective of trade groups, including the U.S. Chamber of Commerce, Fort Worth Chamber of Commerce, Longview Chamber of Commerce, the American Bankers Association, the Consumer Bankers Association, and Texas Association of Business (collectively, the trade groups) filed a complaint in the U.S. District Court for the Northern District of Texas challenging the Final Rule.