A judge in Texas, previously chosen by President Trump, halted President Biden’s plan to reduce credit card late fees to $8.
The new regulation, set to start next week, was blocked by US District Judge Mark T. Pittman issuing a preliminary injunction, a decision favorable to credit card companies and big banks.
The lawsuit against the Consumer Financial Protection Bureau (CFPB) was led by the US Chamber of Commerce. They claimed that the rule, finalized in early March, violated several federal acts.
CFPB’s rule, originally scheduled for Tuesday, aimed to save over $10 billion in late fees annually by reducing the amount from $32 to $8. CFPBThe average saving would be around $220 per year and would impact over 45 million individuals subjected to late fees, according to the agency.
U.S. Chamber of Commerce Litigation Center Counsel Maria Monaghan expressed, “This ruling is a significant victory for responsible consumers who pay their credit card bills on time and businesses seeking to offer affordable credit.” statement.
“The CFPB’s attempted micromanagement would have increased costs for most credit card users and made it more challenging for businesses to meet consumers’ needs. The U.S. Chamber will continue to hold the CFPB accountable in court,” she stated.
Reducing credit card fees is one method the Biden administration is employing to alleviate financial challenges for Americans as they strive to avoid credit card debt following increased inflation.
