Judge blocks Biden administration rule capping credit card late fees at $8

A federal judge in Fort Worth, Texas, on Friday blocked a new Biden administration rule that would prohibit credit card companies from charging customers late fees higher than $8.

A federal judge in Fort Worth, Texas, on Friday blocked a new Biden administration rule that would prohibit credit card companies from charging customers late fees higher than $8. US District Judge Mark T. Pittman, an appointee of former President Donald Trump, granted a preliminary injunction to several business and banking organizations that allege the new rule violates several federal statutes. These organizations, led by the right-leaning US Chamber of Commerce, sued the Consumer Financial Protection Bureau after the rule was finalized in March. The rule, which was set to go into effect Tuesday, would save consumers about $10 billion per year by cutting fees from an average of $32, the CFPB estimated. A preliminary injunction means the rule can’t go into effect until a hearing is held where the case can be adjudicated in greater detail. “The credit card lobby’s lawsuit is an attempt to derail a rule that will save families $10 billion each year in order to continue making tens of billions of dollars in profits by charging borrowers late fees that far exceed their actual costs,” a CFPB spokesperson told CNN in a statement. “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. We will continue to defend this rule so that working families can stop paying excessive late fees that Congress banned more than a decade ago.” The US Chamber of Commerce has not responded to CNN’s request for comment.