Federal court vacates CFPB’s credit card late fee rule

A federal court has struck down the Consumer Financial Protection Bureau’s credit card late fee rule following a settlement between the bureau, the American Bankers Association (ABA), and other plaintiffs.

Last year, the ABA joined the U.S. Chamber of Commerce and other plaintiffs in challenging the rule in the U.S. District Court for the Northern District of Texas, arguing that the CFPB had exceeded its statutory authority. As part of a settlement announced yesterday, the CFPB conceded it had overstepped its authority under the Credit Card Accountability Responsibility and Disclosure Act and that the late fee rule violated the Administrative Procedure Act. The bureau requested that the court vacate the rule, a request the court granted today.