Last week’s edition of Bottom Line noted formal claims by the Consumer Financial Protection Bureau (CFPB) that a Texas-based lawsuit challenging the bureau’s rule on credit card late fees lacked standing. Now, a Texas judge has ordered the U.S. Chamber of Commerce to explain why the lawsuit was filed in the Northern District of Texas, a now popular venue to challenge federal regulatory overreach among the 94 federal district courts.
The CFPB’s $8 late fee rule was issued earlier this month to the largest credit card issuers, with smaller financial institutions excluded from the final rule. However, IBAT and other community bank groups have expressed concern about any federal price caps on bank products.
IBAT and Texas community banks have filed lawsuits against federal regulators after the normal regulatory process, wherein regulators solicit feedback and sometimes tailor or curtail unintended harmful regulations, has been rendered ineffectual, at best, under the current Administration. This development in the credit card late fee lawsuit has potential implications for future industry efforts to preserve community banking amid the recent deluge of federal regulations.
IBAT will continue to monitor and inform its membership as part of the ongoing efforts to counteract extreme regulatory overreach.
