In March, the Consumer Financial Protection Bureau announced that a new federal rule would cap credit card late payment fees at $8 per month, estimating that the change would save American households $10 billion. per year.
A federal judge in Fort Worth temporarily blocked the rule on Friday, siding with bank and credit card company lobbyists who argue in a lawsuit that it is unconstitutional.
The rule was set to take effect Tuesday. Now, the lobbyists can continue their legal fight in U.S. District Court before Judge Mark T. Pittman, who granted the preliminary injunction.
The new rule from the Office of Consumer Affairs would limit issuers to an $8 fee unless they can demonstrate that more money was needed to cover their collection costs. The bureau estimated that the rule would apply to more than 95 percent of all outstanding credit card balances.
The Federal Reserve previously aimed to significantly limit late fees on credit cards in 2010. But a loophole in its rule, which allowed adjustments for inflation, allowed banks and credit card companies to charge averages $32 per month in late fees, depending on the consumer. desk.
In announcing the new rule, Rohit Chopra, director of the bureau, said it would end “the era of big credit card companies hiding behind the excuse of inflation when they raise fees on borrowers and improve their own results. President Biden supported the rule, saying, “The American people are tired of being played for fools.”
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 — to sue Mr. Chopra and his office. Three Texas trade associations are also plaintiffs.
News Source : www.nytimes.com
Gn bussni
