Texas Judge Moves Credit Card Late Fee Challenge to Washington

A lawsuit brought by the US Chamber of Commerce and banking trade groups challenging the Consumer Financial Protection Bureau’s credit card late fee rule will be transferred to Washington, D.C., after a Texas federal judge ruled the case doesn’t belong in his court.

None of the banks or credit companies affected by the CFPB’s rule are based in the Fort Worth Division of the Northern District of Texas, while most of the attorneys working on the case are located in the nation’s capital, Judge Mark Pittman said in a Thursday ruling.

The bureau’s final rule, released March 5, is set to cap credit card late fees at $8, down from the current $30 charge for the first missed payment and $41 for additional missed payments over the subsequent six months. The US Chamber and its fellow plaintiffs—including the American Bankers Association, the Consumer Bankers Association, and the Fort Worth Chamber of Commerce—sued two days later in the Northern District of Texas seeking to block the rule.

Pittman, a Trump-appointed judge, has instead focused on where the case should be heard. Only one bank subject to the CFPB’s rule—Draper, Utah-based Synchrony Bank N.A.—is a member of the Fort Worth chamber, Pittman has noted.

“There is no unique or particular impact felt in the Northern District of Texas and little if any of the events surrounding the Rule have occurred here,” Pittman wrote in his Thursday order transferring the case to the US District Court for the District of Columbia.

“Venue is not a continental breakfast; you cannot pick and choose on a Plaintiffs’ whim where and how a lawsuit is filed,” he added.

The dispute comes amid concerns that industry groups and others have engaged in rampant forum shopping to block federal regulations. The Judicial Conference, the judiciary’s policy arm, issued a new policy earlier this month seeking to curb judge shopping.

The CFPB filed a brief March 21 asking Pittman to transfer the credit card late fee challenge to Washington. The industry plaintiffs filed an appeal March 25 arguing the US Court of Appeals for the Fifth Circuit should impose a preliminary injunction on the rule because of the compliance costs banks will incur to meet a May 14 effective date.

Pittman noted, however, that the Northern District of Texas has a busier docket than the Washington, D.C., court and a longer median time to resolve cases. “Given Plaintiffs’ insistence that time is of the essence for this case, this factor heavily favors transfer,” he said.

The CFPB declined to comment late Thursday. The Chamber, the CBA, and the ABA didn’t immediately respond to requests for comment.

The case is US Chamber of Commerce v. CFPB, N.D. Tex., No. 4:24-cv-00213, opinion issued 3/28/24.

—With assistance from Evan Weinberger