The case challenging the CFPB’s rule is back in the court where it was filed after an appeals court found the judge did not have the authority to move it to the D.C. Circuit.
04/09/2024 1:45 P.M.
2 minute read
Another development in the banking industry case challenging the Consumer Financial Protection Bureau’s credit card late fee rule has it back in its home court for legal proceedings.
Last week, Judge Mark Pittman in the Northern District of Texas approved a venue change to the D.C. Circuit Court requested by the CFPB because not enough banks impacted by the CFPB are in the Texas district, ACA International previously reported.
The plaintiffs, led by the U.S. Chamber of Commerce and American Bankers Association, appealed before Pittman transferred the case, “stripping him of jurisdiction over the case and ability to transfer it,” according to US News & World Report.
The 5th Circuit Court of Appeals voted 2-1 in favor of the banking groups, returning the case to the 5th Circuit, according to the article.
The groups also requested to block the CFPB’s rule because the bureau lacked statutory authority and relied on the use of “secret data collected for an unrelated purpose,” but Pittman moved to change the location of the case first before issuing a decision on their request.
In the opinion (PDF), U.S. Circuit Judge Don Willett said once an appeal is filed on a trial judge’s decision, they “have zero jurisdiction to do anything that alters the case’s status.”
The case has already been transferred to a judge in Washington, who the 5th Circuit has no jurisdiction over. Willett directed Pittman to give that judge notice his transfer “should be disregarded.”
It also states that the district court’s delay in a decision on the groups’ request to block the rule through a preliminary injunction justified their appeal of the jurisdiction change.
By voting for the case to be heard in Texas, the district court is ordered to reopen the case and the D.C. District Court will receive notice that “its transfer was without jurisdiction and should be disregarded,” according to ACA member company Barron & Newburger.
Amid the shifts in the case challenging the rule, the CFPB has announced the effective date is May 14.
Remember, subscribe to ACA Daily and Member Alerts under your My ACA profile when logged in to acainternational.org to receive updates on the ACA Huddle.