Martin & Jones, PLLC
Call today for a Free consultation.

Federal Reserve Board Issues Final Rule On Credit Card Fees

The Federal Reserve Board recently approved a final rule to protect credit card users from unreasonable late payment and other penalty fees. The rule also requires credit card issuers to reconsider any interest rate increases imposed since the beginning of 2009. The final rule represents the third stage of the Federal Reserve's implementation of the Credit Card Accountability Responsibility and Disclosure Act of 2009 ("CARD Act"). The CARD Act was enacted in May 2009 and the provisions of the Act addressed in this final rule went into effect August 22, 2010. The final rule, which amends Regulation Z of the Truth In Lending Act, includes the following provisions:

i) It prohibits credit card issuers from charging a penalty fee of more than $25 for paying late or otherwise violating the account's terms unless the consumer has engaged in repeated violations or the card issuer can show that a higher fee represents a reasonable proportion of the costs it incurs as a result of violations.

ii) It prohibits card issuers from charging penalty fees that exceed the dollar amount associated with a consumer's violation. For instance, an issuer may not charge a $39 fee if a customer is late in making a $20 minimum payment; the fee charged could not exceed the $20 that was due.

iii) It bans "inactivity fees,"such as those based on a consumer's failure to use an account to make new purchases.

iv) It prevents issuers from charging multiple penalty fees based on a single late payment or other violation of the account terms.

v) It requires card issuers that have increased interest rates since January 1, 2009 to evaluate whether the reason for the rate increases have changed and, if appropriate, to reduce the rate.

Click here to read the rule from the Federal Reserve about unreasonable late payment fees.

No Comments

Leave a comment
Comment Information


Contact US Get Help Now

Send us an email or call us today at 800-662-1234 to speak with an attorney about your claim or to arrange a free consultation. It costs nothing to call and there is no obligation. In fact, we are not paid until your case is resolved. Se habla español. If you are unable to travel to one of our offices in Raleigh, Durham and Wilmington, we will meet with you at your location.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Raleigh Office
410 Glenwood Avenue
Suite 200
Raleigh, NC 27603

Toll Free: 800-662-1234
Phone: 919-821-0005
Raleigh Law Office Map

Wilmington Office
1213 Culbreth Drive
Suite 121
Wilmington, NC 28405

Toll Free: 800-662-1234
Phone: 910-256-4005
Wilmington Law Office Map

Durham Office
302 East Pettigrew Street
Suite 330
Durham, NC 27701

Toll Free: 800-662-1234
Phone: 919-544-3000
Durham Law Office Map