Credit Card News
Advertising Disclosure
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from many credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.
Credit Card Applications » News » Card Issuers » Late fees on credit cards causes trouble at American Express

Late fees on credit cards causes trouble at American Express

By
Add to Favorites:

In its annual regulatory filing, American Express based out of New York, said that the late fees being levied by the Centurion unit of the bank was being reviewed not just by the Department of Financial Institutions in Utah, but also by two other agencies in the United States. Centurion was informed this month by the FDIC that there are plans to file formal enforcement action, of which Utah and CFPB will be a part as well.


The outcome of these legal proceedings may result in bringing about many more changes to the current credit card practices being filed by Centurion which includes changes to the current charges, late fees and other payments. American Express said that the costs associated with all these legal proceedings may have a significant impact on the results and operations overall for the company. The probe was termed by American Express as being complex as well as robust. Following the CARD act implemented a couple of years ago, the rules and regulations governing the fees, late payments and other charges on credit cards became even more rigid and complex. America Express said that the changing credit card industry further added to the complexity.


In August 2010, the Credit Card Accountability, Responsibility and Disclosure Act levied caps on every aspect of credit cards including its late payments. The upper limit for late payments on revolving credit cards was capped at $25 while these fees could go up to $35 if the customer repeatedly does not make payments on time. For charge cards, the late fees permitted are up to 3 percent of the overall outstanding balance.


American Express did not mention the overall cost associated with all the legal enforcement actions being taken. Considering the various expenses towards governmental examinations and legal proceedings, the bank assumes that it can be anywhere in the range of zero to $510 million. Though American Express is currently facing legal action, it is not the only lender facing this predicament. There are other major credit card lenders who have been bearing the brunt over the last few months.

Add to Favorites:

Related News:

Banks Post $37.6 Billion in Third Quarter

By Elizabeth Nelson, Posted: December 07, 2012

The Federal Deposit Insurance Corporation (FDIC) reports that banks posted a net income of $37.6 billion during the third quarter of 2012, a good sign the economy is turning around. Continue reading
Bluebird Adds More Features with its FDIC Status

By Elizabeth Nelson, Posted: March 28, 2013

American Express and Walmart have added new features to their Bluebird prepaid card. Customers can now receive direct deposit of government checks due to its new FDIC-insured status, write checks that are guaranteed not to bounce, and mail ... Continue reading
Amex Acquisition Increases Security

By Dar Dowling, Posted: December 9, 2016

American Express has bought InAuth, Inc., a company specializing in providing customers with mobile device authentication and intelligence solutions. Continue reading
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
Get 0% Intro APR on Balance Transfers and Purchases for 21 months. After that, the APR will be 12.24%-22.24% based upon your creditworthiness.
For Excellent/Good Credit
Earn 1% cash back on gas and grocery purchases. Terms apply.
For Fair Credit
Guaranteed $500 Unsecured Credit Limit
For Bad Credit