NEW YORK (AP) – A federal judge in Texas on Thursday accused a major banking industry group and the U.S. Chamber of Commerce of venue shopping in a lawsuit against the Consumer Financial Protection Bureau, a major victory for federal regulators. Ta.
The bureau had argued that the only reason the bank filed the lawsuit in Texas was to increase its chances of obtaining a favorable verdict. Judge Mark Pittman ruled that the case should be transferred to Washington, where the banking lobbies have an army of lawyers who can handle the case.
“The venue is not a continental breakfast. Where and how to file a lawsuit cannot be chosen at the whim of a plaintiff,” Pittman wrote.
This lawsuit concerns new CFPB regulations. credit card late feeIn this case, the customer’s average late fee is capped at $8, which is lower than the average late fee of $32. The major banking group had filed suit in the U.S. District Court for the Northern District of Texas. Because of the country’s historically conservative number of judges, industry and interest groups have frequently filed lawsuits against the Biden administration.
Banks are pushing for an end to late fee rules because they could lose billions of dollars in revenue. At the time it announced the proposal, the bureau estimated that banks were bringing in about $14 billion a year in credit card late fees.
In his ruling, Pittman offered little explanation as to why major industry groups, including the American Bankers Association, the Consumer Bankers Association and the U.S. Chamber of Commerce, filed suit there. The district’s only connection to the banking industry is the Fort Worth Chamber of Commerce, which only recently acquired major banks as members.
The CFPB had argued that Texas was irrelevant for filing banking industry regulation cases, arguing that Washington was a better place to pursue banking industry regulation cases because of its proximity to regulators and its expertise in industry regulation law.
Pittman agreed with the Biden administration.
“In fact, to the best of our knowledge, there is not a single bank or credit card company in the Fort Worth area that would be directly affected by future (CFPB regulations),” he said.
The American Bankers Association and the Consumer Bankers Association did not respond to requests for comment.
