A rule that would have capped credit card fees at $8 nationwide was tossed Tuesday by a federal judge after President Trump’s administration opted not to defend it in court.
Then-President Joe Biden’s administration issued the rule in March 2024, estimating it would save American families $10 billion per year. Banking groups immediately sued to block it from taking effect, and it remained on hold amid challenges in court.
On Monday, the Consumer Financial Protection Bureau and the banking groups agreed to drop the legal fight and banish the rule. North Texas U.S. District Judge Mark Pittman threw the case out on Tuesday.
The CFPB has rolled back several Biden-era policies throughout the year, including attempted enforcement actions against Capital One and Rocket Homes. Trump has attempted to entirely dismantle the agency, which was created to protect everyday Americans in the aftermath of the 2008 financial crisis.
However, Judge Pittman had already suggested the $8 cap on credit card late fees would not survive the legal challenges by banking groups. In December, he said the rule likely violated a 2009 law by not allowing companies to charge sufficient penalty fees.
“It would have also penalized the millions of Americans who pay their credit card bills on time and reduced important incentives for consumers to manage their finances,” the banking groups said Tuesday after the case was dropped.
According to the CFPB, the average credit card late fee is $32, and Americans pay $14 billion to banks every year to cover such fees. Biden’s CFPB director, Rohit Chopra, said the banks “harvest billions of dollars in junk fees from American consumers” each year. Trump fired Chopra in February.
With News Wire Services
