What's happening
This bill limits credit card late fees in New York to no more than 5% of the unpaid balance or $20, whichever is less.
Why it matters
Reduces the financial burden on consumers. By capping late fees, the bill aims to prevent credit card companies from imposing excessively high penalties, helping individuals avoid spiraling debt caused by repeated, expensive late charges.
Improves predictability and fairness. Consumers will know the maximum possible fee they could face for a late payment, making it easier to manage finances and avoid unexpected, punitive charges that can vary widely between issuers.
Targets low-balance cardholders. The "$20 or 5%, whichever is less" formula ensures that people with small unpaid balances are not disproportionately penalized with high flat fees, offering more protection to those most vulnerable to financial hardship.
Potential impact on credit card business practices. The legislation could prompt credit card companies to adjust their fee structures, revenue models, or risk assessments in New York, possibly influencing the overall cost and availability of credit.
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Who cares
Headline styles
Limit Credit Card Late Fees
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to consumer protection
- Referred to consumer protection
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Cap Credit Card Late Fees
In Assembly Committee · Banks · Sponsor Kevin Cahill
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
4266
2019-2020 Regular Sessions
IN SENATE
March 5, 2019
Introduced by Sen. PARKER -- read twice and ordered printed, and when printed to be committed to the Committee on Consumer Protection
AN ACT to amend the general business law, in relation to credit card late charges
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The general business law is amended by adding a new section 518-b to read as follows:
§ 518-b. Credit card late charges. Any charges assessed by a credit card company for late payment shall not exceed five percent of the unpaid balance of any bill, including any interest thereon, or twenty dollars, whichever amount is less.
§ 2. This act shall take effect on the ninetieth day after it shall have become a law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01992-01-9
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
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 charg- es.
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 supple- ment revenue. In some cases, late fees can amount to as much as a 350% increase in an overall balance. This practice 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
2017-18: 52293 - Referred to Consumer Affairs 2015-2016: A.1572 - Referred to Consumer Affairs and Protection 2013-2014: A.1369 - Referred to Consumer Affairs and Protection 2011-2012: A.1009 Referred to Banks 2009-2010: A.487 Referred to Banks 2007-2008: A.7715 Referred to Banks 2005-2006: A.5639 Referred to Consumer Affairs and Protection 2003-2004: A.205 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 90th day after it shall have become law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.