Two Democratic senators are demanding answers from a major pro-business lobbying firm over an “outrageous and unwarranted” lawsuit against a consumer watchdog agency.
on sunday evening letter Sen. Elizabeth Warren (D-Mass.) and Sen. Sheldon Whitehouse (D.R.I.) filed a complaint with the Consumer Financial Protection Bureau (CFPB) against U.S. Chamber of Commerce President Suzanne Clark last month. exclusively shared with The Hill that they questioned the Chamber of Commerce’s decision. As for the new rules that cap late fees on credit cards at $8.
The $8 cap applies only to large card issuers with more than 1 million open accounts and is 75 percent lower than the current average late fee of $32. The CFPB estimates that this rule will save consumers more than $10 billion each year.
“We are deeply concerned by the Chamber of Commerce’s lawsuit that seeks to block the CFPB’s rules from taking effect,” Warren and the White House wrote, adding that they “dramatically improve the lives of millions of Americans.” “A decision to abuse the legal system to overturn the CFPB’s rules cannot be tolerated.” This is in line with the Chamber’s goal of giving individuals and businesses the opportunity to “build a better future for themselves.”
Opponents, including the Chamber of Commerce, argue that the rule exceeds the CFPB’s authority and benefits a few late payers at the expense of all cardholders. They also say late fee caps will lower credit scores and access to credit while increasing late payments and debt.
“In effect, this regulation penalizes responsible consumers who pay their credit card bills on time and forces them to subsidize the costs of consumers who do not. Not only is it bad, it also violates the relevant laws governing late fees. That’s why the Chamber is suing the CFPB to stop this false rule from harming responsible credit card users. “We support Congressional action to improve the economy,” Neil Bradley, the chamber’s executive vice president and chief policy officer, told The Hill.
The chamber filed a lawsuit against the CFPB in the U.S. District Court for the Northern District of Texas, which is seen as more sympathetic to lawsuits challenging Biden administration policies. The American Bankers Association (ABA), Consumer Bankers Association (CBA), Fort Worth Chamber of Commerce, Longview Chamber of Commerce, and Texas Business Association are also plaintiffs.
The skirmish comes as the Biden administration battles “junk fees,” unexpected charges and hidden fees that critics say can quickly inflate and obscure the true cost of goods and services. This is the latest battle.
President Biden touted his administration’s efforts to curb junk fees in his State of the Union address last month, the same day the CFPB filed a lawsuit challenging credit card late fee caps. It was advertised.
“I’m also going to get rid of junk fees, the hidden fees that get added to the end of your bill without you knowing,” Biden said in his speech. “Banks and credit card companies don’t like that.”
Warren and Whitehouse answered a series of questions, including how they came to the decision to sue the CFPB, whether they obtained input from member states before filing the suit, and why they filed the lawsuit in the Northern District of Texas. The chamber of commerce was given until April 29th. Only one of the plaintiffs lives there.
“The Chamber owes the American people an explanation for its opposition to this rule and its defense of highly exploitative late fee practices that harm consumers,” the lawmakers wrote.
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