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Synchrony Financial (NYSE:SYF) said it expects the Consumer Financial Protection Bureau’s final rule to cap credit card late fees to $8 per will reduce its 2024 EPS by $0.15-$0.25. That combines a pretax impact of $800M, with offsets ranging from ~$650M to ~$500M pretax, the credit card company said Tuesday.
To mitigate the lower late fees, the company plans to change its cardholder terms (“CITs”), including increasing its APRs, implementation of fees, and other product changes. It doesn’t expect to change its current retail share arrangements with partners. The company has amended its Safe Harbor statement to reflect the change from $30/$41 to a single $8 amount.
It also expects that litigation will be filed with broad industry support against the government. It anticipates a request for a preliminary injunction, which could delay the rule’s effective date or pause rule implementation.
As it stands now, the effective date for the lower fees are due to take effect 60 days after the rule is published in the Federal Register.
Excluding the late fee rule and the Pets Best gain, Synchrony issued 2024 EPS guidance of $5.70-$6.00. That compares with the average analyst estimate of $5.54.
Synchrony (SYF) stock increased 1.0% in Tuesday afternoon trading.