House Committee Approves Resolution to Nullify CFPB Credit Card Rule
Committee effort most likely will be futile
The House Financial Services Committee on Wednesday approved a resolution that would nullify the Consumer Financial Protection Bureau’s final rule capping most credit card late fees at $8 for card issuers with more than one million open accounts.
The resolution, H.J Res. 122, was approved, 28-22, with Republicans supporting it and Democrats opposing it.
Rep. Andy Barr, R-Ky., chairman of the Financial Services Committee’s Financial Institutions and Monetary Policy, blasted the administration for opposing various consumer fees. Barr, who is the sponsor of the resolution, said the administration is relying on “weapons of junk economics.”
“Unfortunately, the current administration does not believe in the concept of debt owed,” he said, during the markup of the resolution. “We should not want our consumer protection agencies to encourage bad behavior.”
Rep. Maxine Waters, D-Calif, the ranking Democrat on the Financial Services Committee, denounced efforts to nullify the rule.
“While mega-banks and congressional Republicans may not like it, the American people support the CFPB and their junk fee initiative,” she said. She added, “The last I heard, the banks and the credit card companies are doing extremely well.”
The effort most likely is an exercise in futility. Even if it is adopted by the House and Senate, President Biden can be expected to veto it. He has endorsed agency efforts to eliminate so-called “junk fees.” The administration has placed credit card late fees in that category.
The credit card fee cap also is tied up in federal court, where groups including the American Bankers Association and the U.S. Chamber of Commerce have requested an injunction barring implementation of the rule. Currently, the Justice Department is defending the CFPB in that lawsuit.
America’s Credit Unions supports nullification of the rule, which is scheduled to go into effect in May.