Written by Jody Godoy
(Reuters) – A federal judge in a Texas court popular with conservatives to challenge Biden administration policies on Thursday transferred a lawsuit challenging rules curbing credit card late fees to a Washington, D.C., court.
U.S. District Judge Mark Pittman said half of the business groups suing are based in Washington, D.C., and most of the lawyers representing them and the U.S. consumers who created the rules the groups are trying to block. The Financial Protection Bureau said the same.
The CFPB had asked the judge to transfer the case because the card issuers covered by the rule are not based in Fort Worth.
The U.S. Chamber of Commerce, which filed the lawsuit along with five other groups, countered that potentially affected cardholders reside there.
Pittman, an appointee of former President Donald Trump, rejected that argument Thursday, saying the lawsuit could be filed anywhere in the country, not where the underlying events occurred.
“Venues are not continental breakfasts. Plaintiffs cannot choose where and how to sue at their whim,” Pittman said.
Spokespeople for the CFPB and the Chamber of Commerce did not immediately respond to requests for comment.
The group is asking Pittman to block the rule, which is scheduled to go into effect in May, while the lawsuit progresses, saying it would need to send out notices to consumers starting Friday to make the necessary changes. was making a point. They asked the Fifth Circuit Court of Appeals to reconsider Pittman’s decision not to expedite the case.
The rule will address what the CFPB calls “excessive” fees that credit card issuers charge for late payments, which the Consumer Protection Bureau estimates cost consumers $12 billion annually. ing.
Under the rules, credit card issuers with more than 1 million open accounts can only charge $8 in late fees unless they can prove a higher fee is necessary to cover the cost. Under previous rules, issuers could charge up to $30 or $41 for subsequent late payments.
Pittman, one of two active federal judges in Fort Worth, is wondering if a case belongs in his court after federal court administrators announced a new policy aimed at curbing “judge shopping.” He had expressed concerns about what would happen.
The Fort Worth courthouse has become a popular destination for conservative litigants and business groups challenging President Joe Biden’s administration policies, including student loans, guns and LGBTQ rights.
Pittman said Thursday that several factors are driving the transfer of credit card cases, including that his court is busier than his Washington court and that taxpayers pay for CFPB lawyers to travel to Texas. said.
(Reporting by Jody Godoy in New York; Editing by Lincoln Feast.)
