Case challenging CFPB “late fee” rule leaves Texas for D.C.

Texas federal courts (and the Fifth Circuit) have become the go-to venues for industry groups to file legal challenges against recently released federal regulations. But yesterday, the District Court for the Northern District of Texas transferred Chamber of Commerce v. Consumer Fin. Prot. Bureau – a case where the Chamber and others are contesting the CFPB’s “late fees” rule – to the District Court for the District of Columbia.

In early March, the CFPB finalized a rule to lower credit card late fees charged by the largest credit card companies from about $32 down to $8 in most cases. The CFPB estimated that the rule will save families $10 billion a year, or $220 in savings for more than 45 million people who are charged late fees. Industry groups, including the U.S. Chamber of Commerce, the American Bankers Association, the Consumer Bankers Association, and Texas industry groups sued the CFPB to stop the regulation.

In an earlier ruling, the Texas district court denied the industry groups’ motion to expedite consideration of a preliminary injunction, noting that the Northern District of Texas had an extremely busy docket with an average of 287 more filings than each judge in D.C. In granting the groups’ subsequent motion to transfer the case to D.C., the court observed that both defendants and three of the plaintiffs live there, one of the compelling reasons why D.C. is appropriate.

A number of other final regulations challenged by industry groups, including the Federal Trade Commission’s CARS Rule covering auto sales practices, remain on Texas dockets.