In March, the Consumer Financial Protection Bureau announced new federal rules that would cap late credit card payment fees at $8 a month, and estimated the change could save American households $10 billion a year.
On Friday, a federal judge in Fort Worth temporarily blocked the rule, siding with bank and credit card company lobbyists who argue in a lawsuit that the rule is unconstitutional.
The rule was scheduled to take effect on Tuesday. The lobbyists can now continue their legal battle in U.S. District Court before Judge Mark T. Pittman, who granted the preliminary injunction.
The Consumer Affairs Bureau's new rules cap issuers' fees at $8 unless they can show they need more money to cover collection costs. The bureau estimated that this rule applies to more than 95% of all credit card balances.
The Fed had previously aimed to sharply limit credit card late fees in 2010, but consumers say a loophole in the rules that allowed them to adjust for inflation forced banks and credit card companies to charge an average of $32 a month in late fees. A late fee will be charged. Bureau.
Rohit Chopra, director of the bureau, said in announcing the new rules that it would end “the days when major credit card companies would hide behind inflationary excuses when they raised fees for borrowers and boosted their own profits.” Ta. President Biden supported the rule, saying, “Americans are tired of being played for.”
Two days later, the U.S. Chamber of Commerce joined the American Bankers Association and the Consumer Bankers Association (whose boards include executives from Bank of America, Capital One, Citibank, and JPMorgan Chase). He sued Chopra and the department. Three Texas economic groups are also plaintiffs.