Court stops CFPB’s credit card late fees rule

by America's Credit Unions

A Texas district court Friday issued a preliminary injunction to stop the CFPB’s credit card late fees rule from taking effect this week.

The CFPB finalized the rule in March, capping credit card late fees at $8 and eliminating the automatic annual inflation adjustment for the threshold. The rule applies to issuers with more than one million open accounts.

The judge sided with financial institutions who filed a lawsuit against the rule, holding that the CFPB’s funding mechanism is unconstitutional and invalidates the rulemaking.

The U.S. Supreme Court has heard arguments in another lawsuit directly challenging the bureau’s funding structure and is expected to issue a decision by the end of June. The Court’s decision could impact this lawsuit regarding the credit card late fees rule and several other pending lawsuits.

 

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