In a recent development in the ongoing battle over credit card late fees, a Texas federal judge has accused major banking industry groups of “venue shopping” in a lawsuit against the Consumer Financial Protection Bureau (CFPB). Judge Pittman ruled in favor of the CFPB, ordering the lawsuit to be transferred to Washington.
The lawsuit at the center of the controversy deals with new regulations that aim to cap the average credit card late fee at $8, down from the current average of $32. Major banking groups filed the lawsuit in Texas, a state known for its historically conservative judges. These banks are pushing to stop the late fee rule, citing a potential revenue loss estimated at a staggering $14 billion per year.
Judge Pittman found little reason for the industry groups to file the lawsuit in Texas, as most of the affected banks are not located in the area. The CFPB argued that Washington would be a more appropriate venue for the case, due to its proximity to regulators and expertise in industry regulation law.
The American Bankers Association and the Consumer Bankers Association have not commented on the ruling at this time. The decision to transfer the lawsuit to Washington has significant implications for the future of credit card late fees and the banking industry as a whole.
As the debate continues to unfold, all eyes will be on Washington as the legal battle between the banking industry and the CFPB heats up. Stay tuned to White Houser for the latest updates on this developing story.
