HOUSTON (AP) – A Texas judge on Tuesday said Caped credit card deferral fee After officials with President Donald Trump’s administration and a coalition of major banking groups, he agreed that the rules were illegal.
The verdict by US District Judge Mark Pittman of Fort Worth is Consumer Financial Protection Bureau and collections of major industry groups He filed a lawsuit Last year, they announced they had reached an agreement to abandon the rules in order to suspend them. The groups sued included the American Bankers Association, the Consumer Bankers Association, and the American Chamber of Commerce.
The bank and other groups had alleged that the new rules proposed last year under President Joe Biden’s control violated the 2009 Credit Card Accountability and Disclosure or Cards Act, which was enacted to protect consumers from unfair practices by credit card companies. The group argued that the new rules do not allow credit card issuers to charge fees that adequately describe the deterrence or consumer conduct regarding repeated violations.
“The parties agree that the deferred fee rules mean that the Bureau violated the Card Act by not allowing the card issuer to “charge a fine fee that is reasonably and proportionate to the violation,” a CFPB lawyer wrote on Monday, breaking the rules in a joint complaint with the banking group.
Banks are pushing hard to stop late fee rules for the potential billions of dollars that banks lose in income. The CFPB estimated last year when the bank issued a proposal that it brought in credit card late fees of around $14 billion a year.
“This is a victory for consumers and is common sense. If the CFPB rules were in effect, it would have resulted in more payments, more credit scores, higher interest rates and reduced credit access for those who needed it most.
Even if the lawsuit moves forward, Pittman is likely to win in the December ruling, he said he is likely to win as he discovered that the new rules violated the Card Act by not allowing the new rules to charge reasonable and proportionate fines for the violation.
The CFPB has been in chaos since the Trump administration began dismantling it earlier this year, and after mass shootings and targeting it Remove various enforcement measures For companies such as Capital One and Rocket Homes. a Federal judge last month We have issued a temporary injunction temporarily suspending agency termination.
The CFPB was created in the wake of the 2008 financial crisis to protect consumers from unfair, deceptive or abusive practices by a wide range of financial institutions and businesses.
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