In a 37 page order, Chief Judge Virginia M. Kendall in the Northern District of Illinois determined that the Illinois Bankers Association, American Bankers Association, America’s Credit Unions, and Illinois Credit Union League have standing to bring their claims challenging the Illinois Interchange Fee Prohibition Act (the “IFPA”) and sovereign immunity does not apply to the federal claims.… Continue Reading
Credit Cards
CFPB sends circular to law enforcement agencies highlighting credit card reward programs that fail to deliver
By John L. Culhane, Jr. & Ronald K. Vaske on
Posted in CFPB Enforcement, Credit Cards
Some credit card companies operating rewards programs may be violating the law by failing to provide promised rewards, the CFPB said, in a circular to law enforcement agencies.
“When credit card issuers promise cashback bonuses or free round-trip airfares, they should actually deliver them,” CFPB Director Rohit Chopra said, in issuing the circular.… Continue Reading
Federal Judge refuses to lift injunction blocking CFPB credit card late fee rule
Posted in CFPB Rulemaking, Credit Cards
A Texas federal judge has refused to lift the preliminary injunction blocking the CFPB’s enforcement of its final rule that would require larger credit card issuers to lower their late fees to $8 and that would also permit smaller credit card issuers to charge late fees up to $32 for a first violation and up to $43 for a subsequent violation during the next six billing cycles.… Continue Reading
Department of Transportation imposes reward program conditions as part of Alaska Airlines, Hawaiian Airlines merger
Posted in Credit Cards
The Department of Transportation is allowing Alaska Airlines (“Alaska”) and Hawaiian Airlines (“Hawaiian”) to close their merger—as long as the airlines protect their passenger rewards program against devaluation and ensure that consumers will receive the benefits they have earned.
The airlines will be able to consummate the merger on the condition that they continue to operate separately until the DOT gives final approval to the merger application.… Continue Reading
CFPB sues Horizon Card Services and CEO, saying they cheated low-income people through membership scheme
By Ronald K. Vaske on
The CFPB earlier this month filed suit against Horizon Card Services and its CEO and sole shareholder Robert Kane for allegedly tricking subprime consumers into signing up for a high-fee credit card that only allowed them to purchase goods from the company’s overpriced online store.
The outlet that consumers were required to use had a limited selection of overpriced or off-brand goods.… Continue Reading
Transportation Department opens probe into rewards programs at four largest airlines
By John L. Culhane, Jr., Joseph J. Schuster, Ronald K. Vaske & Ballard CFS Group on
Posted in Credit Cards
Saying it wants to protect consumers from unfair, deceptive or anticompetitive practices, the Transportation Department on Sept. 5 launched an investigation into the rewards programs operated by the nation’s four largest airlines.
As part of that probe, Transportation Secretary Pete Buttigieg sent the four airlines letters ordering them to provide records and submit reports about the operation of their programs.… Continue Reading
CFPB files its reply brief in support of the CFPB’s motion to dissolve the preliminary injunction in the credit card late fee lawsuit
On August 22, 2024, the CFPB filed its reply brief in support of its motion to dissolve the preliminary injunction and lift the stay of the CFPB’s credit card late fee final rule (“Rule”) in the lawsuit challenging the Rule.
On May 10, 2024, in issuing the preliminary injunction, Judge Pittman found that the plaintiffs had established a likelihood of success on the merits based solely on the Fifth Circuit’s decision in CFSA v.… Continue Reading
Bank and Credit Union Industry Groups Challenge Illinois Interchange Fee Prohibition Act as Unlawful and Urge the Court to Stop the Operational Havoc
By Kristen E. Larson & Ronald K. Vaske on
Posted in Credit Cards, Debit Cards
On August 15, 2024, the Illinois Bankers Association, American Bankers Association, America’s Credit Unions, and Illinois Credit Union League filed a complaint for declaratory and injunctive relief against the Illinois Attorney General challenging the enactment of the Interchange Fee Prohibition Act (the “IFPA”). The 74 page complaint seeks a declaratory judgment that the IFPA is preempted by federal laws, unconstitutional, and invalid as applied to any participant in the payment system, and to permanently enjoin the state from taking any investigatory or enforcement actions under the IFPA.… Continue Reading
Plaintiffs declare that Fort Worth Chamber is the CFPB’s “natural adversary” in their opposition brief to the CFPB’s motion to dismiss
On August 12, 2024, the plaintiffs filed their brief in opposition to the CFPB’s motion to dismiss Plaintiff Fort Worth Chamber of Commerce (Fort Worth Chamber) for lack of standing and if granted, transfer the case to the Federal District Court for D.C. in the lawsuit challenging the CFPB’s credit card late fee final rule (“Rule”).… Continue Reading
Plaintiffs file their brief in opposition to CFPB’s motion to dissolve the preliminary injunction in the credit card late fee lawsuit
On August 8, 2024, the plaintiffs filed their brief in opposition to the CFPB’s motion to dissolve the preliminary injunction in the lawsuit challenging the CFPB’s credit card late fee final rule (“Rule”). In their brief, the plaintiffs renew their arguments that the CFPB exceeded its authority under Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) and the Truth in Lending Act (TILA) in promulgating the Rule.… Continue Reading