CFPB Tells Large Credit Card Issuers to Get in Line With TILA

  • The CFPB issued a final rule to address late fees charged by “larger card issuers”—credit card issuers that together with their affiliates have one million or more open credit card accounts—to ensure compliance with the Truth in Lending Act’s (TILA) reasonable fee requirements.
  • The final rule adopts a late fee safe harbor threshold of $8, eliminates a higher late fee safe harbor dollar amount for the same violations during the same billing cycle or the next six billing cycles, ends automatic inflation adjustments for the $8 safe harbor late fee, and requires larger card issuers to prove a higher threshold fee is necessary to cover their actual collection costs before they charge such higher fees.
  • The effective date of the final rule will be 60 days after publication of the rule in the Federal Register.