A win-for now-for the US Chamber of Commerce image credit shutterstock

A Trump-appointed judge has blocked CFPB plans to prohibit credit card companies from charging customers late fees higher than $8.

US District Judge Mark Pittman has granted a preliminary injunction to card issuers and banking organisations. These organisations are led by the US Chamber of Commerce. It alleges that the CFPB plans to restrict credit card late fees to $8 violates several federal statutes.

Go deeper with GlobalData

Data Insights

The gold standard of business intelligence.

Find out more

CFPB estimates an average saving of $220 per year for over 45 million consumers charge late fees

The CFPB rule change was due to take effect on 14 May. The CFPB says cutting late fees from the current average $32 to $8 would save consumers about $10bn per year.

US Chamber of Commerce Litigation Center Counsel Maria Monaghan said: “This ruling is a major win for responsible consumers who pay their credit card bills on time and businesses that want to provide affordable credit. The CFPB’s attempted micromanagement would have raised costs for most credit card users. And made it harder for businesses to meet consumers’ needs. The US Chamber will continue to hold the CFPB accountable in court.”

The CFPB’s move on late fees is just one element of a comprehensive CFPB attack on so called ‘junk fees’. The $8 cap would apply to large credit card issuers. The definition would apply to those credit card issuers with more than 1 million accounts. The CFPB estimates that such issuers constitute around 95% of total outstanding credit card debt.

The injunction represents merely a temporary win for card issuers. A full hearing will be scheduled when the case will be argued in more detail.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.