Thomas Opinion Backs Moving Credit Card Late Fee Suit, CFPB Says

The Consumer Financial Protection Bureau is enlisting Justice Clarence Thomas to help battle an industry lawsuit to eliminate the agency’s $8 credit card late fee cap.

Using Thomas’s June concurring opinion in Food and Drug Administration v. Alliance for Hippocratic Medicine, the CFPB argued that US Chamber of Commerce, the American Bankers Association, and the Consumer Bankers Association don’t have standing to sue to block the CFPB’s in the US District Court for the Northern District of Texas. The CFPB’s argument came in support of its bid to either dismiss or transfer the suit in a notice filed with the court July 8.

Thomas expressed concerns about courts’ lenience in allowing trade and other associations to bring cases in courts where they may not have standing to sue in his concurring opinion blocking a challenge to the FDA’s decades-old approval of abortion drug mifepristone.

The CFPB said the industry group lawsuit over the agency’s credit card late fee rule suffers from the same issues that the associations seeking to overturn the FDA’s actions did.

In particular, the national trade associations are joined by three Texas trade groups, including the Fort Worth Chamber of Commerce, in a bid to bring the case in the Northern District of Texas’s Fort Worth Division. But there are no banks that are implicated in the CFPB’s March rule that are members of the Fort Worth Chamber, the CFPB said.

Synchrony Financial became a member of the Fort Worth Chamber ahead of the lawsuit but is based in Utah.

“Allowing the Fort Worth Chamber to bring this suit—and secure venue in this Court—would stretch associational standing beyond even the limits in place now,” the CFPB said.

Judge Mark Pittman has twice attempted to transfer the case to the US District Court for the District of Columbia, and both times the US Court of Appeals for the Fifth Circuit has blocked the transfer.

Along with citing Thomas in a bid to get the case transferred or dismissed, the CFPB also asked Pittman to dissolve a preliminary injunction blocking the credit card late fee rule’s effective date in a second notice of supplemental of authority filed July 8.

Pittman applied a preliminary injunction on May 10, just four days before the rule was set to take effect, based on the trade associations’ likelihood of success in the litigation.

But the CFPB noted that Pittman’s ruling only pertained to a Supreme Court review of the agency’s independent funding through the Federal Reserve.

The high court ruled in May that the CFPB’s funding was constitutional in the CFPB v. Community Financial Services Association case in an opinion Thomas wrote.

The CFPB said in its notice that it was well within its authority to finalize its rule in March, part of the Biden administration’s anti-junk fee campaign, and that the trade groups weren’t likely to succeed in blocking the rule on its merits.

Paul Hastings LLP represents the industry trade groups.

The case is Chamber of Commerce v. CFPB, N.D. Tex., No. 4:24-cv-00213, Notice of Supplemental Authority 7/8/24.