Trump-appointed judge halts Biden administration credit card late fee cap

A former Texas judge appointed by President Trump has halted President Biden’s plan to lower credit card late fees to $8.

The new rule, which was scheduled to go into effect next week, was halted after U.S. District Judge Mark T. Pittman issued a preliminary injunction, ruling in favor of credit card companies and large banks.

The lawsuit against the Consumer Financial Protection Bureau (CFPB) was led by the U.S. Chamber of Commerce. They, along with other banking organizations, argued that the rule, finalized in early March, violates several federal laws.

The CFPB’s rule, which was scheduled to go into effect Tuesday, was aimed at saving more than $10 billion a year by lowering the amount of late fees from $32 to $8, the report said. CFPB. The average savings would be $220 a year, affecting more than 45 million people affected by late fees, the agency said.

“This ruling is a major victory for responsible consumers who pay their credit card bills on time and for businesses that want to provide affordable credit,” said Maria Monahan, an attorney with the U.S. Chamber of Commerce Litigation Center. Stated. statement.

“The CFPB’s attempted micromanagement would have raised costs for most credit card users and made it harder for businesses to meet the needs of consumers. The U.S. Chamber of Commerce will continue to hold the CFPB accountable in court. We will pursue it,” she said.

Lowering credit card fees is one way the Biden administration is trying to ease the financial hardship for Americans trying to avoid credit card debt in the face of rising inflation.