Texas court rejects CFPB’s request to lift preliminary injunction on credit card late fee

A federal court in Texas rejected the Consumer Financial Protection Bureau’s request to remove a preliminary injunction preventing its credit card late fee rule from taking effect and to transfer the lawsuit challenging the rule to Washington, D.C.

Texas Judge Mark Pittman initially issued a preliminary injunction against the CFPB’s rule, citing the plaintiffs’ likelihood of succeeding on the lawsuit’s merits, and granted access to the Bureau’s request to transfer the case to a district court in Washington, D.C. However, Pittman ruled that the case will remain in Texas, referencing federal law stating that a lawsuit against federal agencies may be properly heard in a venue where no real property is at issue.

The CFPB issued a final rule earlier this year to reduce the safe harbor dollar amount for credit card late fees to $8 and implement additional changes, citing its authority under the Credit Card Accountability and Disclosure Act. The American Bankers Association, U.S. Chamber of Commerce, Fort Worth Chamber of Commerce, and other groups sued the CFPB in the U.S. District Court for the Northern District of Texas, arguing it exceeded its statutory authority and used flawed analysis that could harm consumers. Read more on the lawsuit here.