CCAGW Joins Coalition Opposing Price Cap on Credit Card Late Fees
Letters to Officials
President Joseph R. Biden
The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500
Director Rohit Chopra
Consumer Financial Protection Bureau
1700 G St NW
Washington, DC 20552
October 19, 2023
Dear President Biden and Director Chopra,
We, the undersigned organizations dedicated to promoting pro-consumer, pro-growth policies, are writing to express our strong opposition to your proposed rule change to impose a stricter price cap on credit card late fees.
At the White House this month, President Biden touted the rule, alleging it would give the most vulnerable Americans among us a much-needed break. This isn’t true. A stricter price cap will harm not only small businesses and the economy at large but also the low-income workers that the administration is intending to help.
History indicates that consumers are the ones who bear the brunt of regulations like this one because, to offset the resulting costs, financial institutions ultimately impose new fees and higher interest rates while reducing Main Street's credit access. For instance, the Durbin Amendment to the Dodd-Frank Act capping interchange fees on debit cards led to the elimination of free checking accounts, raised minimum balance requirements, and increased maintenance fees. Your new late fee cap will similarly increase financial institutions’ operational costs, which American consumers will again inevitably bear.
What’s more, the regulation may cause smaller lending institutions — like credit unions that heavily rely on fees as a source of revenue — to struggle to sustain their operations, which will reduce the availability of credit and diversity of financial products on the market.
In a letter to the CFPB, the Small Business Administration’s Office of Advocacy noted that you failed to properly consider the impact this rule will have on small entities. The Office noted that “courts have held that agencies must conduct an adequate analysis before certifying a rulemaking,” yet “the CFPB’s certification lacks specific data on the impact of reduced fees, reductions in card issuances, costs of changes to risk analysis and other internal processes and impacts on the cost of credit.” The Office also noted that you admitted to currently lacking data on small depository institutions, which makes the hasty release of this new price cap even more concerning.
For all these reasons and more, we urge you to withdraw the rule.
Sincerely,
Tom Schatz, Council for Citizens Against Government Waste
Ed Martin, Phyllis Schlafly Eagles
Grover Norquist, Americans for Tax Reform
John Berlau, Competitive Enterprise Institute
Cameron Sholty, Heartland Impact
Brent M. Gardner, Americans for Prosperity
Karen Kerrigan, Small Business and Entrepreneurship Council
Gerard Scimeca, Consumer Action for a Strong Economy
Brian Garst, Center for Freedom & Prosperity
Isaac Schick, American Consumer Institute
Stephen Kent, Consumer Choice Center
Patrick Brennen, Southwest Public Policy Institute
Hadley Heath Manning, Independent Women's Forum
Terry Schilling, American Principles Project
George Landrith, Frontiers of Freedom
Saul Anuzis, 60 Plus Association
David Williams, Taxpayers Protection Alliance
Paul Gessing, Rio Grande Foundation
Jeff Mazzella, Center for Individual Freedom
Ryan Ellis, Center for a Free Economy
Phil Kerpen, American Commitment
Seton Motley, Less Government
Dan Perrin, HSA Coalition
Chuck Muth, Citizens Outreach
Wendy Darmon, Palmetto Promise Institute
Judson Phillips, Tea Party Nation
Richard Manning, Americans for Limited Government
Carol Platt Liebau, Yankee Institute
Marcos Lopez, Nevada Policy Institute
Mike Stenhouse, Rhode Island Center for Freedom and Prosperity
Sal Nuzzo, James Madison Institute
CC: The Honorable Sherrod Brown, Chair of the US Senate Committee on Banking, Housing and Urban Affairs
The Honorable Tim Scott, Ranking Member of the US Senate Committee on Banking, Housing and Urban Affairs
The Honorable Patrick McHenry, Chair of the US House Committee on Financial Services
The Honorable Maxine Waters, Ranking Member of the US House Committee on Financial Services
The Honorable Roger Williams, Chair of the US House Small Business Committee
The Honorable Nydia Velazquez, Ranking Member of the US House Small Business Committee
