A federal appeals court has directed a judge in Texas to decide by the end of next week whether to block the U.S. Consumer Financial Protection Bureau's new rule capping credit card late fees at $8.
Groups including the U.S. Chamber of Commerce and American Bankers Association had argued that U.S. District Judge Mark Pittman in Fort Worth had effectively already denied them a preliminary injunction when he decided to instead first determine whether the case should be sent to Washington, D.C.
The 5th Circuit panel on a 2-1 vote on April 5 held that Pittman wrongly transferred the case, and it was sent back to Texas, ensuring the dispute remained in the jurisdiction of the conservative-majority appeals court.
But rather than block the rule itself, the panel in a Tuesday night order set a May 10 deadline for Pittman, an appointee of Republican former President Donald Trump, to decide whether an injunction was warranted.
The panel said it was a court of review, not a court that hears a matter like this in the first instance, and that because Pittman assessed venue first, he "never stated any findings and conclusions as to whether a preliminary injunction was warranted."
The panel will retain jurisdiction for any appeal. Its members include U.S. Circuit Judges Don Willett and Andrew Oldham, both Trump appointees, and Stephen Higginson, an appointee of Democratic former President Barack Obama.
The CFPB declined to comment. The Chamber did not immediately respond to a request for comment.
At issue is a CFPB rule that takes effect on May 14 that targets what the agency has called "excessive" fees credit card issuers charge for late payments, which it estimated costs consumers $12 billion per year.
Under the rule, credit card issuers with more than 1 million open accounts can only charge $8 for late fees, unless they can prove higher fees are necessary to cover their costs. Issuers previously could charge up to $30 or $41 for subsequent late payments.
The business groups filed their lawsuit in the federal courthouse in Fort Worth, whose two sole active judges were appointed by Republican presidents and have often ruled in favor of conservative litigants challenging Democratic President Joe Biden's agenda.
The case is Chamber of Commerce of the United States of America, et al, v Consumer Financial Protection Bureau, 5th U.S. Circuit Court of Appeals, No. 24-10248.
For the plaintiffs: Michael Murray of Paul Hastings
For the CFPB: Stephanie Garlock of the CFPB
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