A federal judge in Texas has officially nullified a Consumer Financial Protection Bureau (CFPB) rule that sought to cap credit card late fees at $8. The move comes after a joint request from both the CFPB and a coalition of business and banking associations, with US District Judge Mark Pittman, a Trump appointee, ruling that the cap violated the Credit Card Accountability and Disclosure Act of 2009.
The rule, introduced by the CFPB last year, aimed to reduce the typical late fee from around $32 to $8, potentially saving consumers more than $10 billion annually. It applied to large card issuers with over one million active accounts, unless they could demonstrate that higher fees were needed to cover their actual collection costs.
Judge Pittman agreed that the cap went against provisions in the 2009 Act that require fees to be “reasonable and proportional” to the cost incurred by card issuers.
Since President Trump removed former CFPB Director Rohit Chopra, the agency has been rapidly scaling back its regulatory ambitions under acting director Russell Vought. In recent weeks, the CFPB has withdrawn several enforcement actions, including lawsuits against major banks like JPMorgan Chase, Bank of America, and Wells Fargo concerning fraud tied to the Zelle P2P network.
It has also reversed course on several regulatory positions, including one that classified pay-in-four BNPL (buy now, pay later) lenders as credit card providers. Additionally, a proposed rule that would have expanded CFPB oversight to include tech companies offering digital wallets—such as Apple, Google, and X—was recently blocked by both the House and Senate.