Despite ruling against the CFPB, banks must prepare alternatives to card late fees
A federal district court's ruling paused the CFPB's late fee limit. But the relief will be temporary, and banks are readying their responses, likely to include higher interest rates, tighter credit, and (yes) more fees.
The temporary reprieve from credit card late fee limits proposed by the Consumer Financial Protection Bureau hangs on a very thin thread.
The eleventh-hour decision on May 10 by the U.S. District Court for the Northern District of Texas to grant a preliminary injunction and stay of the CFPB’s final rule is only a “pause” and not a conclusive finding in the case.
We’ll unpack the ruling and then dig into the broader debate and the potential implications of the rule, both for institutions explicitly covered and those that are not — officially.
District Court’s reasoning hangs on a decision currently before U.S. Supreme Court
U.S. District Court Judge Mark Pittman issued his decision late on Friday, May 10, a deadline that had been imposed by the Fifth Circuit Court of Appeals. Most of the 12-page decision airs Judge Pittman’s feelings about the higher court dictating how he should handle the matter administratively.
continue reading »