In a move to confront racial disparities in credit terms, the Biden administration has unveiled a proposal to cap credit card late fees at $8, challenging the longstanding issue of "junk fees" that disproportionately affect people of color and minorities. The ambitious plan, announced on Tuesday, March 5, aims not only to alleviate immediate financial burdens for consumers but also addresses the systemic inequities faced by those residing in predominantly Black or African American and Hispanic or Latino communities.

Recent studies have shed light on the stark differences in credit terms, re...