The rule capping credit card late fees at $8 has been suspended — here’s what it means for you

in to requestJudge Mark Bittman of the Northern District of Texas sided with the plaintiffs, including the U.S. Chamber of Commerce, in their lawsuit against the CFPB, saying they had cleared hurdles in seeking a preliminary injunction to freeze the rule.

The result, at least for now, maintains a major revenue source for the US card industry. The CFPB estimates that the rule would have saved American families 10 billion dollars A year of fees paid by those who default on their bills. Late fees that typically amount to $32 per incident would have been capped at $8 per incident, limiting the industry’s ability to raise fees.

It is now unclear when or whether the new regulation will be implemented.

“Consumers will incur $800 million in late fees every month that the rule is delayed — money that supports the profit margins of the largest credit card issuers,” a CFPB spokesperson told CNBC on Friday.

The industry’s lawsuit is an attempt to obstruct regulation “in order to continue to make tens of billions of dollars in profits by charging borrowers late fees that far exceed their actual costs,” the spokesperson said.

The CFPB has He said The industry is taking advantage of borrowers with low credit scores by charging late fines that are higher than at any time over the past decade, while trade groups have argued that fee caps are a misguided effort. redistributes Costs for those who pay their bills on time.

The Consumer Bankers Association, one of the groups that sued the CFPB, said it was “pleased with the district court’s decision to grant a preliminary injunction to stop the CFPB’s credit card late fee rule going into effect next week.”

The CBA said it will continue to press its case in the courts on why the CFPB rule should be “repealed in its entirety.”