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
Dear President Biden and Director Chopra,
October 19, 2023
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,
Ed Martin
Phyllis Schlafly Eagles
Cameron Sholty
Heartland Impact
Tom Schatz
Citizens Against Government Waste
Isaac Schick
American Consumer Institute
Hadley Heath Manning
Independent Women’s Voice
Saul Anuzis
60 Plus Association
Jeff Mazzella
Center for Individual Freedom
Seton Motley
Less Government
Wendy Darmon
Palmefo Promise Institute
Carol Plaf Liebau Yankee Institute
Sal Nuzzo
James Madison Institute
Grover Norquist
Americans for Tax Reform
Brent M. Gardner
Americans for Prosperity
Gerard Scimeca
Consumer Action for a Strong Economy
Stephen Kent
Consumer Choice Center
Terry Schilling
American Principles Project
David Williams
Taxpayers Protection Alliance
Ryan Ellis
Center for a Free Economy
Dan Perrin
HSA Coalition
Judson Phillips
Tea Party Nation
Marcos Lopez
Nevada Policy Institute
John Berlau
Competitive Enterprise Institute
Karen Kerrigan
Small Business and Entrepreneurship Council
Brian Garst
Center for Freedom & Prosperity
Patrick Brennen
Southwest Public Policy Institute
George Landrith
Frontiers of Freedom
Paul Gessig
Rio Grande Foundation
Phil Kerpen
American Commitment
Chuck Muth
Citizen Outreach
Richard Manning
Americans for Limited Government
Mike Stenhouse
Rhode Island Center for Freedom and Prosperity
CC: The Honorable Sherrod Brown, Chair of the U.S. Senate Commifee on Banking, Housing, and Urban Affairs
The Honorable Tim Scof, Ranking Member of the U.S. Senate Commifee on Banking, Housing, and Urban Affairs
The Honorable Patrick McHenry, Chair of the U.S. House Financial Services Commifee
The Honorable Maxine Waters, Ranking Member of the U.S. House Financial Services Commifee
The Honorable Roger Williams, Chair of the U.S. House Small Business Commifee
The Honorable Nydia Velázquez, Ranking Member of the U.S. House Small Business Commifee