A former President Trump-appointed judge in Texas halted President Biden’s administration’s plan to decrease late fees on credit cards to $8.
The new rule, which was set to take place next week, was stopped with US District Judge Mark T. Pittman issuing a preliminary injunction, a decision beneficial to credit card companies and big banks.
The lawsuit against the Consumer Financial Protection Bureau (CFPB) was led by the US Chamber of Commerce. They alleged, along with other banking organizations, that the rule, finalized in early March, was in violation of several federal acts.
CFPB’s rule, which was planned to be active on Tuesday, was designed to save more than $10 billion in late fees annually by dropping the amount from $32 to $8, according to CFPB. The average saving would sit at $220 per year and would affect over 45 million who were hit with late fees, according to the agency.
“This ruling is a major win for responsible consumers who pay their credit card bills on time and businesses that want to provide affordable credit,” U.S. Chamber of Commerce Litigation Center Counsel Maria Monaghan said in a statement.
“The CFPB’s attempted micromanagement would have raised costs for most credit card users and made it harder for businesses to meet consumers’ needs. The U.S. Chamber will continue to hold the CFPB accountable in court,” she said.
Slashing credit card fees is one of the ways is one the Biden administration is trying to downsize the financial difficulties for Americans as they try to stay out of credit card debt after increased inflation.
