WASHINGTON—The Defense Credit Union Council (DCUC) is asking the House Committee on Financial Services to support legislation (H.J.Res. 122) that would reject the CFPB’s final rule on credit card late fees.
DCUC president and CEO Anthony Hernandez made the request in a letter to House leaders.
DCUC’s letter highlighted what the association said is the importance 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 argued 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,” Hernandez wrote. “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.
‘Much More Difficult’
“Second, CFPB’s new rule makes it much more difficult for military leaders to establish good order and financial discipline,” continued Hernandez. “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.”
Hernandez added that while DCUC is against “absurdly high late fees,” the market can and will regulate what people can and are willing to pay.
Daily News Headlines. To Your Inbox. Every Day. And It’s Free
The biggest, best and freshest news reporting in credit unions remains free, and now has an added bonus---free shipping to your email address! That’s right. Each morning CUToday.info delivers its daily Fresh Today news update offering the latest headlines and breaking news right to your email, with the easy-to-read headlines format allowing you to click on the stories that interest you most in order to learn more. So stop paying those bank-fee-like subscription prices from other so-called “news” publications!
If you haven’t yet signed up for the new email solution on which CUToday.info has partnered with ResponseGenius, you can do so here. Signing up requires less than one minute of your time—and it’s free!
Please note that after signing up you may need to go to your Spam/Junk folder and mark the morning headlines email as safe. CUToday.info does not provide its list of readers and emails to outside parties, and we will not be contacting you to sell you an extended warranty or sending you any links so you may cash in on an inheritance.
And did we mention it’s free?