The CFPB's move to reopen research into credit card late fees may look like a footnote — but brand partners who aren't prepared could find themselves reacting to volatility rather than managing through it.
The CFPB's move this week to reopen its research into credit card late fees may seem like a minor footnote in the long, winding story of bank regulation. It isn't — or at least, it shouldn't be treated as such by brand partners.
When the $8 late fee cap became a real prospect in 2022, issuers reacted quickly and deliberately. Expense-reduction plans were readied, revenue-generating initiatives were developed, and legal strategies were vetted. The potential hit to P&Ls was significant, and issuers responded accordingly.
While the $8 proposal may have caught issuers off-guard at the time, that is unlikely to happen again. Going forward, issuers will be prepared and have playbooks ready for a host of potential scenarios. Many brand partners do not.