Rohit
Chopra,
director
of
the
Consumer
Financial
Protection
Bureau,
speaks
during
a
Senate
Banking,
Housing,
and
Urban
Affairs
Committee
hearing
in
Washington,
D.C.,
Dec.
15,
2022.
Ting
Shen
|
Bloomberg
|
Getty
Images
The
U.S.
banking
industry
won
a
key
victory
in
its
effort
to
block
the
implementation
of
a Consumer
Financial
Protection
Bureau rule
that
would’ve
drastically
limited
the
fees
that
credit
card
companies
can
charge
for
late
payment.
A
federal
court
on
late
Friday
approved
the
industry’s
last-minute
legal
effort
to
pause
the
implementation
of
a
regulation
that
was
announced
in
March
and
set
to
go
into
effect
on
Tuesday.
In
his
order,
Judge
Mark
Pittman
of
the
Northern
District
of
Texas
sided
with
plaintiffs
including
the
U.S.
Chamber
of
Commerce
in
their
suit
against
the
CFPB,
saying
they
cleared
hurdles
in
arguing
for
a
preliminary
injunction
to
freeze
the
rule.
The
outcome
preserves,
at
least
for
now,
a
key
revenue
stream
for
the
U.S.
card
industry.
The
CFPB
estimates
that
the
rule
would’ve
saved
American
families
$10
billion
a
year
in
fees
paid
by
those
who
fall
behind
on
their
bills.
It
would’ve
capped
late
fees
that
are
typically
$32
per
incident
to
$8
each
and
limited
the
industry’s
ability
to
hike
the
fees.
It
is
now
unclear
when,
or
if,
the
new
regulation
will
go
into
effect.
“Consumers
will
shoulder
$800
million
in
late
fees
every
month
that
the
rule
is
delayed
—
money
that
pads
the
profit
margins
of
the
largest
credit
card
issuers,”
a
CFPB
spokesman
told
CNBC
on
Friday.
The
industry’s
lawsuit
is
an
effort
to
block
a
regulation
“in
order
to
continue
making
tens
of
billions
of
dollars
in
profits
by
charging
borrowers
late
fees
that
far
exceed
their
actual
costs,”
the
spokesman
said.
The
CFPB
has
said
the
industry
profits
off
borrowers
with
low
credit
scores
by
charging
them
ever
higher
late
penalties
over
the
past
decade,
while
trade
groups
have
argued
that
the
fee
caps
are
a
misguided
effort
that redistributes costs
to
those
who
pay
their
bills
on
time.
The
Consumer
Bankers
Association,
which
is
one
of
the
groups
that
sued
the
CFPB,
said
it
was
“pleased
with
the
District
Court’s
decision
to
grant
a
preliminary
injunction
to
stop
the
CFPB’s
credit
card
late
fee
rule
from
going
into
effect
next
week.”
The
CBA
said
it
will
continue
to
press
its
case
in
the
courts
on
why
the
CFPB
rule
should
be
“thrown
out
entirely.”
