Trump Administration Seeks to Scrap $8 Credit Card Late Fee Cap

The Trump administration has moved to overturn a rule that capped credit card late fees at $8, aligning with business and banking groups that argued the regulation was unlawful. In a filing submitted Monday to a federal court in Texas, the U.S. Consumer Financial Protection Bureau (CFPB) and industry groups jointly requested that U.S. District Judge Mark Pittman officially strike down the rule.

Previously, Judge Pittman—appointed by Trump—halted the CFPB from enforcing the regulation, stating it conflicted with the Credit Card Accountability Responsibility and Disclosure Act of 2009. That law allows card issuers to charge penalty fees for violations like missed payments, as long as those fees are deemed reasonable.

The late fee rule was part of Democratic President Joe Biden’s broader initiative to eliminate “junk fees” across consumer finance. It targeted card issuers with more than 1 million open accounts, restricting their ability to charge more than $8 in late fees unless they could justify higher costs.

Although the Trump administration could have defended the rule, it instead opted to support its removal. The CFPB, created after the 2008 financial crisis as a consumer protection watchdog, has long faced opposition from Republicans who claim it operates with excessive autonomy and oversteps legal bounds in its enforcement actions.

The U.S. Chamber of Commerce, which led the lawsuit challenging the rule, has not issued a comment. The CFPB also declined to respond to media inquiries. In a related case, a federal appeals court recently ruled that while Trump’s team may reduce staff at the CFPB, it cannot abolish the agency outright.

The legal battle over the late fee cap underscores the broader ideological divide over consumer protection and financial regulation under Trump versus Biden.