A federal judge upheld an order blocking the Consumer Financial Protection Bureau’s $8 cap on credit card late fees.
Details: U.S. District Judge Mark Pittman in Fort Worth declined to dissolve an injunction he issued in May to block the CFPB’s cap on late fees. Pittman said the cap violated the Credit Card Accountability and Disclosure Act, a 2009 U.S. law aimed at protecting consumers from unfair practices by card issuers.
Background: The CFPB in March issued an ICBA-opposed rule that would cut the credit card late fee safe harbor under the CARD Act from the current levels of $30 for the first violation to $8, without inflation adjustments. The rule would apply to issuers with 1 million or more open accounts.
ICBA View: In a national news release after the CFPB issued the rule earlier this year, ICBA said the rule sends the wrong message that punctual credit card payments are not a significant priority, which will harm consumers by leading to more late payments and additional interest charges.
