A Texas federal judge on Friday upheld a preliminary injunction blocking the Consumer Financial Protection Bureau’s (CFPB) rule to cap most credit card late fees at $8, siding with trade groups arguing the rule violates federal law.
U.S. District Judge Mark T. Pittman rejected the CFPB’s motions to lift the injunction, transfer the case to Washington, D.C., or remove the Fort Worth Chamber of Commerce as a plaintiff in the lawsuit. The injunction remains despite the U.S. Supreme Court affirming the constitutionality of the CFPB’s funding structure, which was initially challenged in the case.
The trade groups, including the U.S. Chamber of Commerce and the American Bankers Association, argue the rule contravenes the Credit Card Accountability, Responsibility and Disclosure (CARD) Act, which allows penalty fees. Judge Pittman agreed, stating the CARD Act permits credit card issuers to charge penalty fees beyond cost recovery, emphasizing the law’s acknowledgment of deterrent fees as reasonable.