Senators Introduce Resolution to Overturn CFPB Rule on Credit Card Penalty Fees
Senate Banking Committee Ranking Member Tim Scott (R-S.C.) introduced a joint resolution to overturn the CFPB's rule capping credit card late penalties. (See related coverage.)
Twelve Republican Senators joined the Ranking Member on the resolution, arguing "the CFPB’s rule will decrease the availability of credit card products for those who need it most, raise rates for many borrowers who carry a balance but pay on time, and increase the likelihood of late payments across the board."
Commentary
Senator Scott maintained that the CFPB’s cap “will decrease the availability of credit card products and important financial services, particularly for Americans who need them most.” He added that the CRA resolution has the support of several financial services industry groups, including the Consumer Bankers Association, America’s Credit Unions, Independent Community Bankers of America, Bank Policy Institute, American Bankers Association, Americans for Tax Reform, Competitive Enterprise Institute and the U.S. Chamber of Commerce. However, the joint resolution, introduced on the first day lawmakers were back in Washington from their spring break, likely faces significant hurdles. Its success would require both houses of Congress and the president’s signature to take effect. President Biden has specifically called for the type of cap on credit card late fees contained in the CFPB’s final rule. If vetoed by the president, the rule could still be invalidated if the veto is overruled by two-thirds of the Senate.
Separately, the U.S. Court of Appeals for the Fifth Circuit ruled on April 5 that an ongoing suit over the CFPB’s final rule will be heard in Fort Worth, Texas, reversing an earlier decision by federal Judge Mark Pittman moving the case to Washington, D.C. (See related coverage.)
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