The Consumer Financial Protection Bureau has submitted a Request for Information regarding credit card late fees and late payments to federal regulators, signaling a potential return to the contentious issue of credit card penalty regulation after the Trump administration helped kill a Biden-era rule in 2025.
The CFPB filed the RFI with the Office of Information and Regulatory Affairs for interagency review on July 8, according to regulatory filings. An RFI typically marks the first formal step in a rulemaking process, though it does not guarantee a new rule will follow.
The submission is striking because the CFPB, under Acting Director Russell Vought, abandoned the previous late-fee rule just over a year ago. In April 2025, the agency joined banking industry trade groups in asking a federal court to vacate the Biden administration’s 2024 rule, which would have reduced the safe harbor for credit card late fees from $30 for a first violation and $41 for subsequent violations to just $8.
The 2024 Rule and Its Legal Demise
In March 2024, the CFPB finalized a rule that would have dramatically reshaped credit card penalty fees. The rule would have reduced the safe harbor amount to $8, eliminated annual inflation adjustments to the safe harbor, and limited late fees so they could not exceed 25% of a consumer’s required minimum payment.
The CFPB estimated the rule would save consumers approximately $10 billion annually by reducing what it characterized as excessive penalty fees. However, banking industry trade associations immediately challenged the rule in court, arguing the CFPB had exceeded its authority under the Credit Card Accountability Responsibility and Disclosure Act (CARD Act) and had effectively imposed an unlawful price control.
A federal judge in Texas agreed with the industry’s arguments. On April 15, 2025, Judge Mark T. Pittman of the U.S. District Court for the Northern District of Texas vacated the rule after the CFPB ceased defending it and filed a joint motion with banking groups requesting dismissal. In the motion, the CFPB explicitly acknowledged that its $8 late fee cap had violated the CARD Act because it did not allow card issuers to charge penalty fees that are “reasonable and proportional” to violations.
The vacated rule would have cost credit card issuers an estimated $10 billion a year in revenue, according to industry estimates.
Why the CFPB Is Revisiting the Issue
Without a publicly released RFI document, the precise reasons for the CFPB’s renewed interest remain unclear. However, several possibilities have been cited by regulatory analysts. The credit card market has evolved significantly since the CFPB’s 2022 inquiry that preceded the 2024 rule, with changes in delinquency rates, consumer borrowing, interest rates, and issuer costs.
Some analysts have suggested the move may be politically motivated. Ian Katz, managing director at Capital Alpha Partners, said the RFI could be a way for the Trump administration to send voters a message on consumer affordability ahead of midterm elections. However, Katz and other analysts expressed skepticism that the RFI would result in a formal rule, given the legal obstacles, banking industry opposition, and leadership transitions at the CFPB.
President Trump has nominated Brian Johnson, a former Capital One executive, to be the permanent CFPB director, replacing Vought, whose tenure as acting director ends August 1 under federal vacancy rules. Johnson is unlikely to champion a late-fee rule, analysts said, though the White House could pressure the agency to prioritize affordability messaging.
The CFPB’s decision to revisit credit card late fees, despite abandoning the Biden administration’s 2024 rule, suggests the issue remains on the agency’s regulatory docket even though it does not appear on the CFPB’s recent public regulatory agenda.
Sources
- Consumer Finance Monitor — CFPB’s RFI submission, background on the 2024 rule, and analysis of why the CFPB may be reopening the issue
- American Banker — Details on the RFI, analyst commentary on likelihood of a new rule, and information on CFPB leadership transitions
- Consumer Financial Protection Bureau — Official announcements on the 2024 final rule and its March 5, 2024 release date reducing the safe harbor to $8
- Federal Register — Details on the 2024 rule’s safe harbor threshold of $8 and publication date of March 15, 2024
