CFPB rule to save Americans $10 billion a year in late fees faces possible last-minute freeze
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A Consumer Financial Protection Bureau regulation that promised to save Americans billions of dollars in late fees on credit cards faces a last-ditch effort to stave off its implementation.
Led by the U.S. Chamber of Commerce, the card industry in March sued the CFPB in federal court to prevent the new rule from taking effect.
That effort, which bounced between venues in Texas and Washington, D.C., for weeks, is now about to reach a milestone: A judge in the Northern District of Texas is expected to announce by Friday evening whether the court will grant the industry's request for a freeze.
That could hold up the regulation, which would slash what most banks can charge in late fees to $8 per incident, just days before it was to take effect on Tuesday.
«We should get some clarity soon about whether the rule is going to be allowed to go into effect,» said Tobin Marcus, lead policy analyst at Wolfe Research.
The credit card regulation is part of President Joe Biden's broader election-year war against what he deems junk fees.
Big card issuers have steadily raised the cost of late fees since 2010, profiting off users with low credit scores who rack up $138 in fees annually per card on average, according to CFPB Director Rohit Chopra.
As expected, the industry has mounted a campaign to derail the regulations, deeming them a misguided effort that redistributes costs to those who pay their bills on time, and ultimately harms those it purports to benefit by making it more likely for users to fall behind.
Up for grabs is the $10 billion in fees per year that the CFPB estimates the rule would save American families by pushing down late penalties to $8 from a typical $32 per incident.
Card issuers including Capital
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