A federal judge in Texas has temporarily suspended a plan by the Biden administration aimed at reducing late payment fines with credit cards to $8, which was set to begin next week.

 

The nationwide temporary restraining order issued by Judge Mark Pittman in the Northern District of Texas favors major banks and leading credit card companies, which annually accrue billions of dollars in late payment fines and sought to block the proposal to avoid its implementation. Additionally, it represents a victory for the United States Chamber of Commerce, which spearheaded the lawsuit on behalf of the banks.

 

The new regulations proposed by the Consumer Financial Protection Bureau would have capped most late payment fines with credit cards at $8 or required banks to demonstrate why they should charge more than $8 for such a fine instead of the current $32.

 

White House spokesperson Jeremy Edwards said in a statement Friday night, "We are disappointed that a court has sided with House Republicans, major banks, and special interests to pause a critical measure to save billions of dollars in abusive fees to American families."

 

Banks have viewed the campaign as a political battle against their business model, while consumer advocates have seen these bank fees as excessive given the risk assumed by banks and credit card companies.

 

Liz Zelnick from Accountable US criticized the United States Chamber of Commerce for favoring corporations at the expense of families, ensuring that late payment fines with credit cards remain high, reaching up to $41.