Overview

• U.S. District Judge Mark T. Pittman permanently vacated the CFPB's rule capping credit card late fees at $8, ruling it violated the 2009 CARD Act's requirement for 'reasonable and proportional' penalty fees.
• The decision follows a joint motion by the CFPB and major banking groups to end the rule, concluding over a year of contentious litigation.
• The $8 cap, introduced under the Biden administration, aimed to save consumers billions annually but faced strong opposition from banks citing potential $10 billion yearly revenue losses.
• Banking groups, including the American Bankers Association and U.S. Chamber of Commerce, welcomed the ruling, claiming the fee cap would have harmed credit access and consumer financial habits.
• The ruling aligns with broader deregulatory efforts under the Trump administration, which has sought to limit the CFPB's authority and roll back Biden-era consumer protection measures.