Lawsuits piling up for the CFPB
Published by: Sean Brown
March 20, 2024 | Regulatory
The ability for credit unions and their member-owners to jointly decide what is best for them is a pillar of the credit union difference. That is why the League vehemently opposed the Consumer Financial Protection Bureau’s recent price-setting rule on credit card late fees. Less than a week after the CFPB finalized this misguided rule, the U.S. Chamber of Commerce and other financial groups filed a lawsuit seeking a preliminary injunction against the implementation of the rule.
The lawsuit, filed in the Northern District of Texas, claims the CFPB’s rule:
- Violates the Credit Card Accountability Responsibility and Disclosure Act by preventing issuers from collecting reasonable and proportional late fees when cardholders don’t pay their bills on time;
- Violates the Administrative Procedure Act by promulgating a final rule that is “arbitrary and capricious,” and relies on data collected from only the largest banks for a different purpose; and
- Was issued with funds drawn in violation of the U.S. Constitution’s Appropriations Clause.
The League will follow this lawsuit as its outcome likely dictates the implementation of a rule that could impact credit union members’ access to credit. Moreover, the League is also tracking the lawsuit currently halting the CFPB’s expansion of Section 1071 of the Dodd-Frank Act. Plaintiffs in that case are seeking summary judgment which would all but end the proposed rulemaking. Be on the lookout for more from the League as these cases make their way through the judicial process.
Contact Sean Brown for questions or assistance.
