Provides that any charges assessed by a credit card company for late payment shall not exceed five percent of the unpaid balance of any bill or twenty dollars

BILL NUMBER:A487

Title of bill

An act to amend the general business law, in relation to credit card late charges

Purpose or general idea of bill

This legislation provides that any charges assessed by a credit card company for late payment will not exceed 5% of the unpaid balance of any bill or twenty dollars, whichever is less.

Summary of specific provisions

This bill adds a new section 518-b to the general business law to carry out the above provision.

Effects of present law which this bill would alter

Existing business law does not provide limits on credit card late charges.

Justification

This legislation is introduced in response to an increasing reliance the bank industry has placed on the use of charges of this nature to supplement revenue. In some cases, late fees can amount to as much as a 350% increase in an overall balance. This prac- tice is predatory in the sense that it further restricts payment options for certain individuals, setting into motion a cycle of continuous debt to the benefit of the industry and the detriment of the customer.

Prior legislative history

2007-2008 A7715 referred to Banks 2005-2006 A5639 referred to consumer affairs and protection

2003-2004 A205 referred to consumer affairs and protection

2001-2002 referred to consumer affairs and protection

2000 referred to consumer affairs and protection

Fiscal implications

None.

Effective date

This act shall take effect on the ninetieth day after it shall have become law.