Saturday, July 20, 2024

ABA, U.S. Chamber of Commerce file suit against CFPB’s late fees rule

The American Bankers Association joined the U.S. Chamber of Commerce and four business groups in filing a lawsuit in federal court on Thursday to challenge the Consumer Financial Protection Bureau’s new rule limiting credit card late fees.

The plaintiffs are also seeking a preliminary injunction barring the bureau from implementing the new rule.

Earlier last week, the CFPB issued a final rule to lower the safe harbor dollar amount for late fees to $8, eliminate a higher safe harbor dollar amount for late fees for subsequent violations of the same type, and eliminate the annual inflation adjustment for the safe harbor amount that was provided by the Federal Reserve in 2010. In a lawsuit filed in U.S. District Court for the Northern District of Texas, ABA and the other plaintiffs said the rule not only slashes by 75% the safe harbor amount initially set by the Fed, it also upends more than a decade of regulation.