A federal judge in Fort Worth, Texas, on Friday blocked a new Biden administration rule that would prohibit credit card companies from charging customers late fees higher than $8.
US District Judge Mark T. Pittman, an appointee of former President Donald Trump, granted a preliminary injunction to several business and banking organizations that allege the new rule violates several federal statutes.
“Consumers will shoulder $800 million in late fees every month that the rule is delayed — money that pads the profit margins of the largest credit card issuers.
“It is disappointing that the court has granted this last-ditch effort by the banks to prevent these critical limits on credit card late fees from going into effect next week,” said Chuck Bell, advocacy program director for non-profit Consumer Reports.
The rule, first proposed in February 2023, is part of a broader push by the Biden administration to eliminate “junk fees,” considered hidden or misleading charges to consumers.
According to a national Consumer Reports survey published in September, one in five American adults said they had paid a credit card late fee in the previous 12 months.
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