Chamber of Commerce of the United States of America, et al, v Consumer Financial Protection Bureau, ___F.4th.____ (5th Cir. 5/1/24), case No. 24-10248:
The U.S. Circuit Court of Appeals for the Fifth Circuit, on 5/1/24, directed a US District Judge in Texas, to rule, by the end of next week, whether or not to issue a preliminary injunction, to block the U.S. Consumer Financial Protection Bureau’s new rule capping credit card late fees at $8.
The order, opens new tab late Tuesday by the three-judge panel of the New Orleans-based 5th U.S. Circuit Court of Appeals came in response to a bid by banking and business groups to have the appellate court itself decide whether the rule should be blocked.
Groups including the U.S. Chamber of Commerce and American Bankers Association had argued that U.S. District Judge Mark Pittman in Fort Worth had effectively already denied them a preliminary injunction when he decided to instead first determine whether the case should be sent to Washington, D.C.
The 5th Circuit panel on a 2-1 vote on April 5 held that Pittman wrongly transferred the case, and it was sent back to Texas, ensuring the dispute remained in the jurisdiction of the conservative-majority appeals court.
But rather than block the rule itself, the panel in a Tuesday night order set a May 10 deadline for Pittman, an appointee of Republican former President Donald Trump, to decide whether an injunction was warranted.
The panel said it was a court of review, not a court that hears a matter like this in the first instance, and that because Pittman assessed venue first, he “never stated any findings and conclusions as to whether a preliminary injunction was warranted.”
The panel will retain jurisdiction for any appeal. Its members include U.S. Circuit Judges Don Willett and Andrew Oldham, both Trump appointees, and Stephen Higginson, an appointee of Democratic former President Barack Obama.
The CFPB declined to comment. The Chamber did not immediately respond to a request for comment.
At issue is a CFPB rule that takes effect on May 14 that targets what the agency has called “excessive” fees credit card issuers charge for late payments, which it estimated costs consumers $12 billion per year.
Under the rule, credit card issuers with more than 1 million open accounts can only charge $8 for late fees, unless they can prove higher fees are necessary to cover their costs. Issuers previously could charge up to $30 or $41 for subsequent late payments.
The business groups filed their lawsuit in the federal courthouse in Fort Worth, whose two sole active judges were appointed by Republican presidents and have often ruled in favor of conservative litigants challenging Democratic President Joe Biden’s agenda.