A recent survey commissioned by the Consumer Bankers Association (CBA) found a majority (57 percent) of Americans believe credit card late fees are legitimate and not “junk fees” as the Consumer Financial Protection Bureau (CFPB) has labeled them.
The survey also found nearly half (48 percent) of Americans are unaware of the consequences associated with paying a credit card bill late, and an overwhelming majority (76 percent) support the idea that paying on time is a personal responsibility.
These survey results come just days after the CFPB published its notice of proposed rulemaking (NPRM) which would limit the ability of credit card companies to apply fees to accounts that do not make payments in a timely manner.
“As we all work to support hardworking families and small businesses struggling with economic headwinds, this survey confirms credit card late fees are not considered junk – they’re part of a financial framework millions of consumers rely on,” commented CBA President and CEO Lindsey Johnson. “In fact, Americans overwhelmingly believe credit card late fees are legitimate, as opposed to fees charged in other sectors of the economy, value the service credit card issuers provide, and accept the responsibility of being a credit cardholder and paying on time.”
Less than a quarter (24 percent) of those surveyed expressed the opinion that late fees did not provide some service or function or were unfair.
Among other policy changes, the NPRM proposes to lower the safe harbor dollar amount to an $8 threshold, eliminate the annual inflation adjustment for the safe harbor amount, and cap late fees at 25% of the required minimum periodic payment.
The NPRM also solicits comments on whether the CFPB should mandate a “15-day courtesy period” that would prohibit issuing late fees within 15 calendar days after each payment due date.