Judge Mark Pittman issued a preliminary injunction blocking the CFPB from implementing its new credit card late fee rule.
Judge Pittman expressed concern about potential 'mischief' and took issue with being ordered to rule on the preliminary injunction within 10 days.
One in five American adults had paid a credit card late fee in the previous 12 months, and eighty-two percent supported lowering the maximum late fee.
The CFPB spokesperson expressed disappointment at the court's decision, stating that it prevents saving American families billions in junk fees.
The rule aimed to cap late fees at $8 per month for large credit card issuers with over 1 million accounts.
In a recent development, Judge Mark Pittman of the Northern District of Texas issued a preliminary injunction blocking the Consumer Financial Protection Bureau (CFPB) from implementing its new credit card late fee rule. The rule, which was set to cap late fees at $8 per month for large credit card issuers with over 1 million accounts, was met with opposition from several business and banking organizations.
The CFPB's push to eliminate junk fees is part of efforts to ease financial burdens for many Americans. One in five American adults had paid a credit card late fee in the previous 12 months, and eighty-two percent supported lowering the maximum late fee. However, Pittman expressed concern about potential 'mischief' wherein plaintiffs could come up with creative reasons for demanding prompt preliminary-injunction rulings under a dictated timeline.
The judge noted that he had set a hearing on the preliminary injunction in case he found venue was proper but canceled it after ordering the case transferred to the Washington federal trial court. Pittman also took issue with the Fifth Circuit's order for him to rule on the preliminary injunction within 10 days, stating that this seemed to be a usurpation of his docket-management authority.
The CFPB spokesperson expressed disappointment at the court's decision, stating that it prevents saving American families billions in junk fees. The case is currently being litigated in the US District Court for the Northern District of Texas.
A federal judge in Texas temporarily halted the Biden administration's plan to lower late fees on credit cards to $8.
Judge Mark Pittman imposed a nationwide injunction, benefiting banks and major credit card companies.
Banks bring in approximately $14 billion in credit card late fees annually.
Accuracy
The Consumer Financial Protection Bureau proposed regulations would have set a ceiling of $8 for most credit card late fees or required banks to justify higher fees.
Deception
(100%)
None Found At Time Of
Publication
Fallacies
(85%)
The article contains an appeal to authority and inflammatory rhetoric. It also uses a dichotomous depiction by presenting the issue as a battle between banks and consumer advocates without providing nuanced perspectives.
. . .a win for the big banks and major credit card companies, which collect billions in revenue each year in late fees and were looking to stop the proposal from going into effect.
We are disappointed that a court sided with House Republicans, big banks and special interests to hit pause on a critical measure to save American families billions in junk fees.
In their latest in a stack of lawsuits designed to pad record corporate profits at the expense of everyone else, the U.S. Chamber got its way for now – ensuring families get price-gouged a little longer with credit card late fees as high as $41.
Judge Mark T. Pittman granted a preliminary injunction to several business and banking organizations against the new Biden administration rule that would prohibit credit card companies from charging customers late fees higher than $8.
The new rule applies to large credit card issuers with more than 1 million accounts, representing over 95% of total outstanding credit card debt.
The Biden administration's push to eliminate junk fees is part of efforts to ease financial burdens for many Americans.
One in five American adults had paid a credit card late fee in the previous 12 months and eighty-two percent supported lowering the maximum late fee.
Accuracy
Judge blocks Biden administration rule capping credit card late fees at $8
The rule, which was set to go into effect Tuesday, would save consumers about $10 billion per year by cutting fees from an average of $32.
Banks bring in approximately $14 billion in credit card late fees annually.
A federal judge in Texas temporarily halted a plan by the Biden administration to lower late fees on credit cards to $8.
The new regulations proposed by the Consumer Financial Protection Bureau would have set a ceiling of $8 for most credit card late fees or require banks to show why they should charge more than $8 for such a fee.
White House spokesperson Jeremy Edwards expressed disappointment at the court’s decision, stating that it prevents saving American families billions in junk fees.
Banks had sued to stop the lawsuit earlier this year but faced an obstacle when Judge Mark Pittman ordered the case moved to Washington, D.C., due to few banks operating in northern Texas.
An appeals court reversed most of Pittman’s decision and ordered him to rule on the bank’s request for an injunction.
President Joe Biden’s reelection campaign has highlighted his administration’s push to clamp down on what he calls ‘junk fees’, which are bank-related fees like late fees, ATM fees, and overdraft fees.
Accuracy
Judge Mark Pittman imposed a nationwide injunction, benefiting banks and major credit card companies.
The Consumer Financial Protection Bureau proposed regulations would have set a ceiling of $8 for most credit card late fees or required banks to justify higher fees.
Deception
(50%)
The article contains selective reporting as it only reports on the temporary halt of the Biden administration's plan to lower late fees on credit cards to $8 by a federal judge in Texas. It does not mention that this ruling is being challenged and that similar rulings have been made in other districts. The article also uses emotional manipulation by using phrases like 'hit pause', 'price-gouged', and 'junk fees' to elicit an emotional response from the reader.
Every month that the credit card late fee rule is blocked will cost Americans over $800 million.
The temporary nationwide injunction imposed by Judge Mark Pittman in the Northern District of Texas is a win for the big banks and major credit card companies, which collect billions in revenue each year in late fees and were looking to stop the proposal from going into effect.
In their latest in a stack of lawsuits designed to pad record corporate profits at the expense of everyone else, the U.S. Chamber got its way for now -- ensuring families get price-gouged a little longer with credit card late fees as high as $41.
Fallacies
(85%)
The author makes an appeal to emotion by using the phrase 'junk fees' and 'price-gouged'. This is an informal fallacy as it is a loaded term that elicits negative emotions from the reader without providing any actual evidence or definition of what constitutes a junk fee.
]Every month that the credit card late fee rule is blocked will cost Americans over $800 million[
Bias
(95%)
The author expresses a clear bias against the banks and credit card companies by using language such as 'big banks' and 'major credit card companies' to depict them in a negative light. The author also quotes Liz Zelnick from Accountable.US, who uses inflammatory language against the U.S. Chamber of Commerce, further demonstrating bias.
big banks and major credit card companies
price-gouged a little longer with credit card late fees as high as $41
Judge Mark Pittman of the Northern District of Texas issued a preliminary injunction blocking the CFPB’s credit card late fee rule from going into effect.
The judge expressed concern about potential ‘mischief’ wherein plaintiffs could come up with creative reasons for demanding prompt preliminary-injunction rulings under a dictated timeline.
A new federal rule announced by the Consumer Financial Protection Bureau (CFPB) in March 2023 was scheduled to cap fees on late credit card payments at $8 a month, estimating savings of $10 billion annually for American households.
The CFPB’s new rule would limit issuers to an $8 fee unless they could prove additional costs were required for collection.
The rule applied to over 95% of all outstanding credit card balances and aimed to end the practice of banks and credit card companies increasing late fees using inflation as an excuse.
Accuracy
The new federal rule announced by the Consumer Financial Protection Bureau (CFPB) in March 2023 was scheduled to cap fees on late credit card payments at $8 a month.
Deception
(100%)
None Found At Time Of
Publication
Fallacies
(95%)
The article contains an appeal to authority fallacy when it quotes President Biden stating 'The American people are tired of being played for suckers.' This statement is not a logical argument and does not provide evidence or proof that the rule is unjust. Additionally, there are dichotomous depictions in the article when it refers to late credit card fees as 'junk fees' implying that they serve no purpose and are unnecessary. However, this term is subjective and does not provide a logical argument for why the rule limiting these fees is necessary.
]The American people are tired of being played for suckers.[/
