CFPB to abandon enforcement of pair of rules

The Consumer Financial Protection Bureau, in the past week has vacated and/or abandoned enforcement of a pair of rules.

On Monday, the CFPB reached an agreement with the American Bankers Association and other plaintiffs to settle a lawsuit over its rule on credit card late fees. The CFPB last year issued a final rule to lower the safe harbor dollar amount for late fees to $8, eliminate a higher safe harbor dollar amount for late fees for subsequent violations of the same type, and eliminate the annual inflation adjustment for the safe harbor amount that was provided by the Federal Reserve in 2010. ABA joined the U.S. Chamber of Commerce and other plaintiffs in challenging the rule in U.S. District Court for Northern Texas, arguing the bureau exceeded its statutory authority.

Under the terms of the settlement, the bureau acknowledged it exceeded its authority under the Credit Card Accountability Responsibility and Disclosure Act, and that the late fee rule violates the Administrative Procedure Act. The parties asked the court to vacate the final rule. The judge must approve the agreement.

Additionally, the Bureau said last week it would not enforce a Biden-era rule requiring certain non-bank lenders to register information about their company with the bureau along with any agency or court orders concerning consumer protection violations.

The 2024 rule requires nonbanks to report information to the CFPB, which would be made available through a public registry. In a brief statement on Friday, the bureau said it will not prioritize enforcement or supervision actions with regard to entities that do not satisfy future deadlines under the regulation.