The US Consumer Financial Protection Bureau (CFPB) is planning to ramp up scrutiny of the late fee charged by credit card issuers, Reuters reported citing sources.

The CFPB may also rewrite the rules that govern the threshold of such fees as part of the wider crackdown on ‘junk fees’, the sources said.

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In January this year, the CFPB launched an initiative to curb ‘junk fees’, which include fees like overdraft, credit card late-payment fees and non-sufficient funds (NSF) fees.

CFPB estimates suggest that in 2019, banks and credit unions earned over $15bn in overdraft and related fees and collected $20bn as credit card late-payment fees in 2020.

The current norms allow card issuers to charge a late-payment fee, which should not be more than the cap set by the consumer watchdog annually.

The CFPB is weighing its options and could amend the rules on how the late payment fee threshold is calculated, the sources said.

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It is also exploring options to curb potentially illegal fees under the Credit Card Accountability Responsibility and Disclosure Act of 2009, the sources added.

“Every year, junk fees hit millions of Americans with expenses they do not expect and did not consider when choosing their financial institution,” CFPB senior adviser Brian Shearer was quoted by the news agency as saying.

Shearer did not comment on CFPB’s plans.

Notably, several key players in the market have updated their policies on overdraft fees and NSF fees.

“Recent announcements on overdraft fees by some of the largest banks show that real change is possible, and we are going to keep pressing to increase competition and save Americans money,” Shearer added.