Last Friday, May 10, the Texas federal district court hearing the lawsuit challenging the CFPB’s final credit card late fee rule (Rule) granted the plaintiffs’ preliminary injunction motion and stayed the Rule.  The Rule was set to become effective tomorrow, May 14.  The district court’s ruling followed the entry of an order by the Fifth Circuit vacating the district court’s order denying the plaintiffs’ motion for expedited consideration of their preliminary injunction motion and remanding the case to the district court with instructions to rule on the plaintiffs’ preliminary injunction motion by May 10.… Continue Reading

On May 9, 2024, the Consumer Financial Protection Bureau (CFPB) and U.S. Department of Transportation (DoT) held a 98-minute joint hearing on airline and credit card rewards programs.  CFPB Deputy Director Zixta Martinez introduced the panel and public commenters.

In his opening remarks, Secretary of Transportation Pete Buttigieg compared frequent flyer and credit card rewards to savings accounts. … Continue Reading

Our special guest is Brian Johnson, Managing Director of Patomak Global Partners and former CFPB Deputy Director.  In November 2023, the CFPB issued a proposed rule to supervise nonbank companies that qualify as larger participants in a market for “general-use digital consumer payment applications.”  In this episode, we first discuss the CFPB’s authority to supervise nonbank entities considered to be “a larger participant of a market for other consumer financial products or services” and  its previous use of that authority. … Continue Reading

CFPB Director Rohit Chopra has released a statement about the proposal issued by the Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, and Federal Housing Finance Agency to address incentive-based compensation arrangements.  The rulemaking is required by Section 956 of the Dodd-Frank Act, which directed the FDIC, OCC, FHA, as well as the Federal Reserve Board, National Credit Union Administration, and U.S.… Continue Reading

In the lawsuit challenging the CFPB’s final credit card late fee rule (Rule), the Fifth Circuit has denied the CFPB’s petition for a panel rehearing to reconsider the panel’s order vacating the district court’s order transferring the case to the U.S. District Court for the District of Columbia and issuing a writ of mandamus directing the district court to reopen the case. … Continue Reading

As part of its junk fees initiative, the CFPB released a new report, “Price Complexity in Laboratory Markets.”  In its press release about the report, the CFPB states that because it “suggests consumers tend to pay more for products that have more complex pricing structures,” the report “has implications for understanding how junk fees impede fair and competitive pricing in markets like auto loans or mortgages, where consumers have to evaluate extended warranties, add-ons, closing costs, and a wide variety of other fees instead of an all-inclusive price.” … Continue Reading

A surprising development took place yesterday in the lawsuit challenging the CFPB’s final credit card late fee rule (Rule).  The Fifth Circuit entered an order vacating the district court’s order denying the plaintiffs’ motion for expedited consideration of their preliminary injunction motion and remanding the case to the district court with instructions to rule on the plaintiffs’ preliminary injunction motion by May 10, 2024. … Continue Reading

Our special guest is Andrew Nigrinis of Legal Economics LLC and former CFPB enforcement economist.  The CFPB’s final credit card late fee rule lowers the safe harbor late fee amount that card issuers other than “smaller card issuers” can charge to $8.  We first discuss how the final rule differs from the proposed rule and the existing rule, who are “smaller issuers” not subject to the lower safe harbor amount, and the changes made by the final rule for larger issuers. … Continue Reading

Last week ended with several new developments in the lawsuit challenging the CFPB’s final credit card late fee rule (Rule), both of which appear to reduce the likelihood that the Rule will be stayed before its May 14 effective date.

First, the CFPB filed a Petition for Panel Rehearing on April 18 and the Fifth Circuit has directed the plaintiffs to file a response by April 30. … Continue Reading