Current:Home > StocksFederal judge temporarily halts Biden plan to lower credit card late fees to $8-LoTradeCoin
Federal judge temporarily halts Biden plan to lower credit card late fees to $8
View Date:2024-12-24 00:13:39
LOS ANGELES (AP) — A federal judge in Texas temporarily halted a plan by the Biden administration to lower late fees on credit cards to $8 that was slated to go into effect next week.
The temporary nationwide injunction imposed by Judge Mark Pittman in the Northern District of Texas is a win for the big banks and major credit card companies, which collect billions in revenue each year in late fees and were looking to stop the proposal from going into effect. It is also a win for the U.S. Chamber of Commerce, which led the lawsuit on behalf of the banks.
The new regulations that were proposed by Consumer Financial Protection Bureau would have set a ceiling of $8 for most credit card late fees or require banks to show why they should charge more than $8 for such a fee.
The rule would bring the average credit card late fee down from $32. The bureau estimates banks bring in roughly $14 billion in credit card late fees a year.
Banks had sued to stop the lawsuit earlier this year, but they had run into a roadblock when Pittman ordered the case moved to Washington, D.C., because of the fact that few banks operate in northern Texas. However, an appeals court reversed most of Pittman’s decision and ordered him to rule on the bank’s request for an injunction.
While Pittman did impose the injunction, he used a significant portion of his order to chastise the Fifth Circuit Court of Appeals for sending this case back to him after he had already ruled that the case should be handled out of Washington. Critics of the lawsuit have called the case the latest example of judicial “forum shopping,” where a company files a lawsuit in a friendly district in order to have a greater likelihood of getting a favorable ruling.
As part of his reelection campaign, President Joe Biden has tried to highlight his administration’s push to clamp down on what he calls “junk fees,” which are bank-related fees like late fees, ATM fees and overdraft fees.
Banks have seen the campaign as a political battle against their business model, while consumer advocates have seen these bank fees as excessive based on the amount of risk that banks and credit card companies are taking on.
“In their latest in a stack of lawsuits designed to pad record corporate profits at the expense of everyone else, the U.S. Chamber got its way for now -- ensuring families get price-gouged a little longer with credit card late fees as high as $41,” said Liz Zelnick with Accountable.US.
veryGood! (5719)
Related
- How Alex Jones’ Infowars wound up in the hands of The Onion
- McDonald's space spinoff CosMc's to launch new Texas location during solar eclipse
- American Nightmare Subject Denise Huskins Tells All on Her Abduction
- Festival-Approved Bags That Are Hands-Free & Trendy for Coachella, Stagecoach & Beyond
- Multi-State Offshore Wind Pact Weakened After Connecticut Sits Out First Selection
- The amount of money Americans think they need to retire comfortably hits record high: study
- Travis Kelce announces lineup for Kelce Jam music festival. Will Taylor Swift attend?
- Autism in young girls is often misdiagnosed or overlooked. A doctor explains why.
- Katharine Hayhoe’s Post-Election Advice: Fight Fear, Embrace Hope and Work Together
- Klaus Mäkelä, just 28, to become Chicago Symphony Orchestra music director in 2027
Ranking
- It's Red Cup Day at Starbucks: Here's how to get your holiday cup and cash in on deals
- Saddle up Cowgirl! These Are the Best Western Belts You’ll Want to Pair With Everything
- The Fate of Grey's Anatomy Revealed After 20 Seasons
- What Love on the Spectrum's Dani Bowman, Abbey Romeo & Connor Tomlinson Really Think of the Series
- Real Housewives of New York City Star’s Pregnancy Reveal Is Not Who We Expected
- Trump goes after Biden on the border and crime during midwestern swing
- Diddy's ex Misa Hylton threatens legal action over 'excessive' force against son in raid
- Longtime north Louisiana school district’s leader is leaving for a similar post in Texas
Recommendation
-
Dramatic video shows Phoenix police rescue, pull man from car submerged in pool: Watch
-
North Carolina redistricting attorney who fell short in federal confirmation fight dies at 69
-
Germany changes soccer team jerseys over Nazi symbolism concerns
-
Off the Grid: Sally breaks down USA TODAY's daily crossword puzzle, Face First
-
Groups seek a new hearing on a Mississippi mail-in ballot lawsuit
-
Judge tosses lawsuit filed by man who served nearly 40 years for rape he may not have committed
-
Will the soaring price of cocoa turn chocolate into a luxury item?
-
Arby's is giving away one free sandwich a week for the month of April: How to get yours