DCUC Sends Letter to HFSC on Consumer Financial Protection Bureau’s Final Rule: Credit Card Late Fees

WASHINGTON, D.C. – On April 16, 2024, the Defense Credit Union Council (DCUC) sent a letter to the Honorable Patrick McHenry, Chairman, and the Honorable Maxine Waters, Ranking Member, of the Committee on Financial Services, U.S. House of Representatives. In the letter, DCUC expressed its support “for H.J.Res. 122, a Congressional Review Act resolution to reject the Consumer Financial Protection Bureau’s (CFPB) final rule on credit card late fees.

​DCUC’s letter highlighted the importance of protecting unsuspecting consumers from unfair and deceptive trade practices and how defense credit unions’ history reflects their long-standing commitment to offering safe financial programs to military and veteran communities. DCUC also pointed out how the new CFPB rule would negatively impact these important communities:
 
“First, issuers will be forced to increase costs to offset delinquencies and charge offs. In fact, CFPB admits that the final late fee rule will cause harm to 74 percent of consumers who pay their credit cards on time. Higher principal and interest payments will increase the burden on all military consumers. This is in addition to current challenges such as food insecurity, spouse employment, and rising childcare costs. This is especially troubling since more military families rely on credit cards to make ends meet.
 
Second, CFPB’s new rule makes it much more difficult for military leaders to establish good order and financial discipline. When credit card late fees are significantly reduced, there is less incentive to pay on time. Although military members are instructed to honor their credit card commitments, DoD lacks the mechanisms to prevent, intervene, or enforce standards until it is too late. Thus, it is hard to see how imposing government controls on late fees will improve financial discipline and responsibility. We fear CFPB’s rule will make both worse.
 
Finally, while we are against absurdly high late fees, we believe the market can and will regulate what people can and are willing to pay. The credit card market is already competitive. Especially when marketing access for consumers with lower credit scores or little to no credit history. Those who can offer better terms and access to credit cards will prevail. Military families are very perceptive when it comes to additional costs.”
 
DCUC’s continues to advocate for, and champion, the interest of all credit unions serving on or near United States military installations around the world. “Everything we do is in support of our military and veteran communities, no matter which credit union they join,” said DCUC in its letter to Chairman McHenry and Member Waters.
 
To learn more about DCUC’s advocacy, visit www.DCUC.org/advocacy.