(HorizonPost.com) – Senators Elizabeth Warren (D-MA) and Sheldon Whitehouse (D-RI) are demanding answers from the US Chamber of Commerce over its lawsuit against the Consumer Financial Protection Bureau (CFPB), The Hill reported.
In an April 14 letter to Chamber of Commerce President Suzanne Clark, the Democrat senators demanded to know why the Chamber joined the American Bankers Association and the Consumer Bankers Association in suing the CFPB over its new rule that caps credit card late fees at $8.
The lawsuit, filed in the Northern District of Texas in early March, seeks a preliminary injunction to prevent the new rule from taking effect. The plaintiffs argue that the CFPB exceeded its authority and ignored Congress’ intent that late fees should be high enough to deter consumers from making late payments while ensuring cardholder accountability and compensating card issuers for their costs.
The new late fee cap is far lower than the current average fee of $32.
Describing the lawsuit as “outrageous and unwarranted,” Senators Warren and Whitehouse said in their letter that they were concerned the suit could prevent the rule from taking effect and accused the Chamber of abusing the legal system to overturn a rule “that would drastically improve the lives of millions of Americans.”
In a statement to The Hill, US Chamber’s Executive Vice President Neil Bradley said the CFPB’s rule would punish the consumers who pay their bills on time “by forcing them to subsidize the costs of those who do not.” He said the rule was “bad public policy” and “contrary to the relevant law governing late fees.”
Bradley said in a press release after the lawsuit was filed that the CFPB’s own analysis found that limiting late fees would pass the costs onto all credit card customers, including those who have never made a late payment.
The lawsuit accuses the CFPB of violating the 2009 CARD Act (Credit Card Accountability, Responsibility, and Disclosure Act) and the Administrative Procedure Act.
The senators gave the Chamber until April 29 to respond to a series of questions in their letter.
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