- Key insight: Analysts view the development of a new CFPB rule as highly unlikely, given that a previous rule was struck down by a judge.
- What's at stake: Credit-card issuers sued and successfully killed a Biden-era rule that would have cost the industry an estimated $10 billion a year in late-fee revenue.
- Forward look: The request for information could be used by the Trump administration as part of a populist "affordability" message ahead of the midterm elections.
The Consumer Financial Protection Bureau has submitted a formal request for information from credit-card issuers about late fees, a stunning move given that the Trump administration helped kill a Biden-era rule that would have dropped late fees to $8.
The request for information was submitted Monday for regulatory review to the Office of Information and Regulatory Affairs. It was first reported by Law360.
While the document is not yet public, it technically marks the first step toward an official rulemaking. But several analysts said the request doesn't mean the CFPB plans to issue its own rule. The push to reduce late fees was a policy centerpiece of the Biden administration and former CFPB Director Rohit Chopra.
A few analysts called the Trump-era CFPB's turnabout politically motivated ahead of the midterm elections.
"We doubt that this will end up being a formal rule. The RFI could be a way for the administration to send voters a message on 'affordability' ahead of the midterms," said Ian Katz, managing director at Capital Alpha Partners, in a research note. "There would be considerable obstacles, including legal challenges, vehement opposition from the banking industry, and the fact that the CFPB's downsizing might make it difficult to carry out a rule-making process."
Jaret Seiberg, an analyst at TD Cowen, said the request alone does not signify enough to determine if the Trump administration plans to make late fees an issue in the midterms.
"For it to be an election issue, the deliverable would need to be more concrete," Seiberg wrote in a research note. "For instance, the President's prior call to cap credit card interest rates at 10% is a concrete proposal that could appeal to voters. We do not see the GOP swaying voters by saying the CFPB is asking questions about credit card late fees."
John Hecht, an equity analyst at Jefferies, also expressed doubt that anything will come of the request.
"Given the legal challenges that vacated the first proposal, and the fact that the landscape in the court system has not changed ... we see this [as] unlikely to proceed to a point of implementation," Hecht wrote in a research note.
The request has to be reviewed by the Office of Management and Budget, whose director Russell Vought is also the CFPB's acting director. OMB typically takes weeks to review such requests, though it could take less time because of Vought's dual roles, said Seiberg, who wrote in a research note that the request for information alone "cannot result directly in a policy change."
Moreover, the CFPB is in the process of changing directors, further complicating the issue.
President Trump has nominated Brian Johnson to be the permanent director because Vought's tenure as acting director ends on Aug. 1, due to limits under the Federal Vacancies Reform Act. The CFPB has not yet confirmed who would assume the acting role on Aug. 2 if Johnson is not confirmed by the Senate by then.
Johnson, a former executive at Capital One Financial, which is the largest credit-card issuers by volume, is unlikely to support a late fee rule, according to analysts.
Johnson "wouldn't be a fan of a late-fee rule. Having said that, if the White House told him to be a fan, he might have to become one," Katz wrote. "We would think that if the administration wants to take advantage of the affordability messaging opportunity, it would want to move soon and release the RFI. However, a formal rulemaking process would likely take many months."
"It would be odd for the agency to start a rulemaking process when it is about to undergo a change in leadership," Seiberg wrote. "We are not convinced this will result in a proposal to do anything with late fees."
Vought played a role in helping the industry eliminate the 2024 late-fee rule, finalized in the waning days of the Biden administration.
A coalition of bank trade groups and the U.S. Chamber of Commerce
However, the $8 late fee cap never took effect. After the changeover to the Trump administration, the CFPB filed a joint motion with the American Bankers Association and five trade groups, asking a Texas court to vacate the rule. A federal judge issued an injunction and ultimately vacated the rule in 2025 after the Trump administration declined to defend it in court, ending a year of contentious litigation.
In the litigation, Mark Paoletta, the CFPB's chief legal officer, said the late-fee rule violated the Credit Card Accountability Responsibility and Disclosure Act of 2009, known as the CARD Act, which allows credit card issuers to charge penalty fees that are "reasonable and proportional" to the violations. In early 2025, U.S. District Judge Mark T. Pittman
The 2024 Biden-era late fee rule would have stripped credit-card issuers of an estimated $10 billion a year in revenue. Companies that are heavily reliant on fee revenue — including Synchrony Financial, Bread Financial Holdings, and Capital One — faced the possibility of massive changes to their business models.
