Judge scraps CFPB rule capping credit card late – Business News
A federal choose on Tuesday threw out a US Consumer Financial Protection Bureau rule capping credit card late charges at $8, after the company agreed with opponents that the rule adopted during President Joe Biden’s administration was unlawful.
US District Judge Mark Pittman in Fort Worth, Texas granted a joint request by the CFPB and a coalition of six business and banking teams, together with the U.S. Chamber of Commerce and American Bankers Association to scrap the rule.
Pittman, an appointee of President Trump, ruled that the regulation violated the Credit Card Accountability and Disclosure Act of 2009 as a result of it prohibited card issuers from charging charges “reasonable and proportional to violations.”
U.S. District Judge Mark Pittman ruled the $8 cap on credit card late charges violated the Credit Card Accountability and Disclosure Act of 2009. REUTERS
The rule capped late charges for issuers with more than 1 million open accounts until they might show greater charges had been essential to cowl their prices.
It had been half of Biden’s crackdown on “junk fees,” and was meant to scale back the everyday late charge from about $32.
The Trump administration is reversing many Biden-era guidelines and insurance policies that it considers unfriendly to business.
In a March 2024 lawsuit in opposition to the rule, the business and banking teams accused the CFPB of overstepping its authority and ignoring Congress’ intent that charges be high enough to discourage late funds and compensate card issuers for his or her prices.
The cap had been half of the Biden administration’s crackdown on “junk fees” and was meant to scale back the everyday late charge from about $32. volff – stock.adobe.com
They additionally stated the rule was unfair to many shoppers, as a result of it could drive issuers to move prices to cardholders who pay their payments on time.
In a joint assertion on Tuesday, the teams referred to as Pittman’s order “a win for consumers and common sense.”
Pittman in Fort Worth, Texas granted a joint request by the CFPB and different companies. United States District Court Northern District of Texas
The Trump administration has additionally sought to dismantle the CFPB.
On April 11, a federal appeals courtroom in Washington, D.C. stated the administration can shrink the CFPB, however not a lot that it can’t perform its statutory duties.
