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Bill

S 4022

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

2025 Regular Session Introduced by Kevin Parker

Bill S 4022 caps late payment fees for credit cards at 5% of the unpaid balance or $20, protecting consumers from excessive charges and promoting fair lending.

REFERRED TO CONSUMER PROTECTION
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WeVote Research Nonpartisan
Bill Summary · S 4022

Summary of Bill S 4022

Bill Overview

Bill Number: S 4022
Title: Limitation on Late Payment Charges by Credit Card Companies
Status: Referred to Consumer Protection
Introduced On: January 31, 2025
Classification: Legislative Bill

Purpose and Intent

The primary purpose of Bill S 4022 is to protect consumers from excessive late payment charges imposed by credit card companies. The bill aims to establish a cap on the fees that can be assessed for late payments, thereby promoting fairer lending practices and reducing the financial burden on consumers who may inadvertently miss payment deadlines.

Key Provisions

  • Fee Limitation: The bill stipulates that any late payment charges assessed by credit card companies shall not exceed:
    • Five Percent of the unpaid balance of any bill, or
    • Twenty Dollars, whichever is lower.

This provision is designed to ensure that consumers are not penalized excessively for late payments, making it easier for them to manage their finances.

Impact

Who Would Be Affected

  • Consumers: The bill directly benefits credit card holders by limiting the financial penalties they face for late payments. This is particularly significant for individuals who may experience temporary financial difficulties.
  • Credit Card Companies: Financial institutions and credit card issuers will need to adjust their late fee structures to comply with the new regulations, potentially affecting their revenue from late fees.

Broader Implications

By capping late payment fees, the bill could encourage responsible credit usage and improve overall consumer financial health. It may also lead to a more competitive market among credit card companies, as they may seek to attract customers with more favorable terms.

Legislative Process

  • Current Status: As of January 31, 2025, the bill has been referred to the Consumer Protection committee for further consideration. The next steps will involve discussions, potential amendments, and voting within the committee before it can progress to the full legislative body.

Related Bills

Bill S 4022 is part of a broader legislative context, with several related bills from prior sessions, including:
- S 2377
- S 5419
- S 2293
- S 4266
- S 4428
- S 5222
- A 7075 (companion bill)

These related bills may address similar issues or propose additional consumer protections in the financial sector.

Conclusion

Bill S 4022 represents a significant step towards consumer protection in the credit card industry by limiting late payment charges. Its successful passage could lead to more equitable treatment of consumers and a shift in how credit card companies structure their fees.

Compiled from official sources — confirm details with the bill’s official record.

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