The banks have filed for a stay of the move to a new court as well as appealed a denial of an injunction to put the rule on hold.
04/02/2024 3:05 P.M.
1.5 minute read
A banking industry case challenging the Consumer Financial Protection Bureau’s credit card late fee rule will be heard in the D.C. Circuit Court following a request to move the case by the bureau.
Judge Mark Puttman in the Northern District of Texas approved the venue change because not enough banks impacted by the CFPB’s rule are located in the district, Bloomberg Law reports.
Multiple banking plaintiffs in the U.S. Chamber of Commerce case also filed an emergency motion in the U.S. Court of Appeals for the 5th Circuit in Texas for an administrative stay of the rule, ACA International previously reported.
In addition to the U.S. Chamber of Commerce, the Fort Worth Chamber of Commerce, Longview Chamber of Commerce, American Bankers Association, Consumer Bankers Association and Texas Association of Business are plaintiffs in the case.
The 5th Circuit stayed the move of the case to Washington until the end of the day April 2, Bloomberg Law reports. However, a judge in the D.C. Circuit is already assigned to the case, according to the article.
“The banking industry now must see whether trade groups can successfully appeal the venue move and pause the rule, while banks and other companies rethink their instinct to head to Texas,” it states.
Meanwhile, the 5th Circuit also said it would fast track oral arguments on the plaintiffs’ request to stay the case transfer.
The D.C. Circuit Court Judge, Amy Berman Jackson, could also decide to hold the CFPB’s rule until a U.S. Supreme Court decision is issued in the case challenging the bureau’s funding structure, Bloomberg Law notes in the article.
“If the high court upholds the CFPB’s funding, the D.C. district court would then have to rule on procedural challenges to the late fee rule. If the Supreme Court rules against the CFPB, the late fee cap would likely be struck down.”
Amid the legal challenges to the rule, the CFPB has announced the effective date is May 14.
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