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US Judge throws out CFPB's cap on credit card late fees

A US judge has killed of a Consumer Financial Protection Bureau rule capping credit card late fees at $8.

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US Judge throws out CFPB's cap on credit card late fees

Editorial

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Texas-based US District Judge Mark Pittman granted a joint request from the CFPB itself and a coalition of business and banking groups to scrap the rule, according to Reuters.

Donald Trump-appointed Pittman agreed that the rule violated the Credit Card Accountability and Disclosure Act of 2009 by stopping card issuers from charging fees "reasonable and proportional to violations".

The rule applied to issuers worth more than a million open accounts unless they could prove high fees were needed to cover costs.

Introducing the rule last year, the CFPB claimed it would save Americans more than $10 billion in late fees annually by reducing the typical fee from $32 to $8.

Since Trump fired director Rohit Chopra soon after taking office, the CFPB has been busy scaling back its activities and reversing previous positions under acting Director Russell Vought.

Last month it ditched an interpretive rule declaring that pay-in-four BNPL lenders should be treated in the same way as credit cards.

In recent weeks it has also dropped a host of lawsuits, including against JPMorgan Chase, Bank of America and Wells Fargo over fraud on the Zelle P2P payments network.

Meanwhile, a rule that would give the watchdog oversight of tech giants such as Apple, Google and X, that offer digital payment apps and wallets has been killed off by the Senate and House of Representatives.

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Comments: (1)

Ketharaman Swaminathan

Ketharaman Swaminathan Founder and CEO at GTM360 Marketing Solutions

Kudos to Judge. And yet another slap in the face of Chopra CFPB for behaving like a rogue regulator by putting price control on private sector companies. 

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