RSSFederal Judge Mark Pittman earlier this week granted the Consumer Financial Protection Bureau’s request for a 30-day pause in a lawsuit challenging its legal authority to cap most credit card late fees at $8.
The American Bankers Association, Consumer Bankers Association and other trade groups filed a lawsuit against the rule last March in the Fort Worth-based Northern District of Texas. The CFPB had asked for the delay to allow for more time for the groups to discuss a possible resolution to the case. Pittman had already issued a preliminary injunction against the rule last May, four days before it was to take effect.
“Counsel for the bureau have begun discussing with plaintiffs’ counsel potential ways to resolve this case,” the CFPB wrote in its March 12 filing. “Based on those conversations, the bureau is optimistic that an agreement can be reached within 30 days, but the parties require additional time to see if an agreed resolution is feasible.”
The late fee rule would apply to credit card issuers with more than 1 million open accounts. Limiting overdraft fees will reduce fees that currently cost American families more than $14 billion annually and save them more than $10 billion in annual late fees, according to the CFPB.
