From CNBC: 2024-05-09 10:08:55

The Consumer Financial Protection Bureau’s regulation on credit card late fees is facing a lawsuit from the U.S. Chamber of Commerce. A judge in Texas is expected to decide if the rule will be frozen before taking effect, capping late fees at $8 per incident to save Americans billions.

The credit card industry argues that the regulation would unfairly redistribute costs to responsible bill payers. The CFPB estimates $10 billion in annual savings for families by reducing late fees. Card issuers like Capital One are preparing for revenue hits with potential interest rate hikes or new fees.

The Chamber of Commerce is likely to succeed in delaying the rule through legal efforts in Texas or the Fifth Circuit Court of Appeals. This could lead to a lengthy trial to settle the dispute. The industry group filed in Texas for a more favorable outcome, possibly blocking the rule from implementation.

Read more: CFPB rule faces possible freeze