Consumer Financial Protection Bureau Director Rohit Chopra speaks during a Senate Banking, Housing and Urban Affairs Committee hearing on December 15, 2022 in Washington, DC.
Shen Ting | Bloomberg | Getty Images
U.S. banks score key victory in efforts to block new bill Consumer Financial Protection Bureau The rule would significantly limit the fees credit card companies can charge for late payments.
Later Friday, federal court officially recognized The industry took last-minute legal action to suspend enforcement of a rule announced in March that will take effect on Tuesday.
in his OrderJudge Mark Pittman of the Northern District of Texas sided with plaintiffs, including the U.S. Chamber of Commerce, in a lawsuit against the CFPB, saying they had cleared a roadblock in their bid for a preliminary injunction freezing the rule.
For now at least, the outcome preserves a key revenue source for the U.S. credit card industry. CFPB estimates rule will save American families $10 billion People who are behind on their bills pay for a year. It would limit late fees, which are typically $32 per incident, to $8 per incident and limit the industry’s ability to raise fees.
It’s unclear when or if the new rules will take effect.
“If the rule is delayed, consumers will be responsible for $800 million in late fees each month, money that could boost profit margins for the largest credit card issuers,” a CFPB spokesperson told CNBC on Friday.
The industry’s lawsuit is aimed at blocking a regulation “that would continue to make tens of billions of dollars in profits by charging borrowers late fees that far exceed their actual costs,” a spokesman said.
CFPB has explain The industry has profited over the past decade by charging higher late fees to borrowers with lower credit scores, and trade groups argue that fee caps are a misguided effort. reallocate The cost to those who pay their bills on time.
The Consumer Bankers Association, one of the groups suing the CFPB, said it was “pleased by the district court’s decision to grant a preliminary injunction to prevent the CFPB’s credit card late fee rule from taking effect next week.”
The CBA said it would continue to pursue court action to explain why the CFPB’s rules should be “completely repealed.”
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