Court Vacates CFPB Credit Card Late Fee Rule
Posted: Apr 16 2025
A federal court has vacated the CFPB’s rule on credit card late fees a day after plaintiffs reached an agreement with the bureau to end a lawsuit over the rule.
Under the terms of the settlement, the CFPB acknowledged it exceeded its authority under the Credit Card Accountability Responsibility and Disclosure Act, and that the late fee rule violates the Administrative Procedure Act. The CFPB asked the court to vacate the rule, which it did today.
In a joint statement, ABA and the other plaintiffs welcomed the court’s decision.
“If the CFPB’s rule had gone into effect, it would have resulted in more late payments, lower credit scores, higher interest rates and reduced credit access for those who need it most,” they said. “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. We appreciate the CFPB’s recognition that the rule violated the law, and the bureau’s willingness to resolve our legal challenge.”