Warren, Whitehouse demand Chamber explain decision to sue CFPB

Taylor Giorno
·3-min read
Warren, Whitehouse demand Chamber explain decision to sue CFPB

Two Democratic senators are demanding answers from a pro-business lobbying giant regarding its “outrageous and unwarranted” lawsuit against a consumer watchdog agency.

In a Sunday evening letter to U.S. Chamber of Commerce President Suzanne Clark shared exclusively with The Hill, Sens. Elizabeth Warren (D-Mass.) and Sheldon Whitehouse (D-R.I.) questioned the Chamber’s decision to sue the Consumer Financial Protection Bureau (CFPB) last month over a new rule to cap credit card late fees at $8.

The $8 cap, which only applies to large card issuers with more than 1 million open accounts, is 75 percent less than the current average late fee of $32. The CFPB estimates the rule would save consumers more than $10 billion each year.

“We are deeply concerned by the Chamber’s lawsuit to prevent the CFPB’s rule from taking effect,” Warren and Whitehouse wrote, adding the “decision to abuse the legal system to overturn a CFPB rule that would drastically improve the lives of millions of Americans is not consistent” with the Chamber’s stated goal to give individuals and businesses the opportunity to “build a better future for themselves.”

Opponents, including the Chamber, say the rule exceeds the CFPB’s authority and benefits a small cohort of late payers at the expense of all cardholders. They also say the late fee cap will lead to more late payments and debt while reducing credit scores and access to credit.

“The fact is this rule will punish responsible consumers who pay their credit card bills on time by forcing them to subsidize the costs of those who do not. Not only is it bad public policy, the regulation is contrary to the relevant law governing late fees. That is why the Chamber has sued the CFPB and is supporting congressional action to stop this misguided rule from harming responsible credit card users,” Neil Bradley, executive vice president and chief policy officer at the Chamber, told The Hill.

The Chamber filed the lawsuit against the CFPB in the U.S. District Court for the Northern District of Texas, which is perceived to be more sympathetic to lawsuits challenging Biden administration policies. The American Bankers Association, Consumer Bankers Association, Fort Worth Chamber of Commerce, Longview Chamber of Commerce and Texas Association of Business are also plaintiffs.

The skirmish is the latest battle in the Biden administration’s war against “junk fees,” unexpected charges or hidden fees that critics say can quickly add up and obscure the real cost of goods and services.

President Biden touted his administration’s efforts to curb junk fees during his State of the Union address last month, which took place the same day the CFPB filed its lawsuit challenging the credit card late fee cap.

“I’m also getting rid of junk fees, those hidden fees added at the end of your bills without your knowledge,” Biden said during his speech. “The banks and credit card companies don’t like it.”

Warren and Whitehouse gave the Chamber until April 29 to respond to a series of questions including what preceded the decision to sue the CFPB, whether it received input from members before filing the lawsuit and why they filed the lawsuit in the Northern District of Texas, where just one of the plaintiffs resides.

“The Chamber owes the American public an explanation for its opposition to this rule and its defense of deeply exploitative late fee practices that harms consumers,” the lawmakers wrote.

For the latest news, weather, sports, and streaming video, head to The Hill.

  • Up next
  • Up next
  • Up next
  • Up next

Latest stories

  • 6 family office funds tied to Singapore launder case got tax breaks

    Six single family office funds linked to a S$3 billion money laundering case in Singapore have received tax incentives from the Monetary Authority of Singapore.

  • Russia's war-driven economy is so hot that the World Bank upgraded it to a 'high-income country'

    Russia's trade rebounded by nearly 7% last year, while activities in the financial sector and construction grew by 6.6% and 3.6% respectively.

  • A-G’s report: Mara Inc’s inefficient operations lead to RM286m loss

    KUALA LUMPUR, July 4 — Government-linked Mara Inc has incurred RM286.30 million in losses due to inefficient business op...

  • Masco Lost 16% in 3 Months: Should You Buy MAS Stock on the Dip?

    Masco (MAS) is reeling under weak demand. Will the stock be able to secure a path for sustained growth given its operational efficiency and strategic expansion initiatives?

  • Fed officials touted 'modest further progress' on inflation at last meeting: Minutes

    Fed officials offered encouragement about the path of inflation while meeting in June, but they made it clear they didn’t expect to lower rates until they saw more evidence of a downward trend.

  • Asia stocks notch records; pound calm after Labour landslide

    Asian share markets scaled new highs on Friday as investors sized up U.S. rate cuts for September and the mood was upbeat, while the euro hit a three-week peak ahead of French elections. Sterling was firm at $1.2767 as Britain's Labour Party was set for a landslide poll victory that will sweep it to power after 14 years of Conservative rule. Elsewhere, the dollar was slightly weaker and Treasury yields marginally higher in Tokyo, as trade resumed after the U.S. Independence Day holiday.

  • Assessing SMART Global (SGH) Stock Ahead of Its Q3 Earnings

    SMART Global's (SGH) third-quarter fiscal 2024 results are likely to reflect strength across Penguin solutions amid macro headwinds.

  • Mondelez (MDLZ) Navigates Hurdles Through Portfolio Strength

    Mondelez's (MDLZ) focus on core categories and portfolio strength place it well in a challenging and dynamic operating environment.

  • SLB and TotalEnergies Ink 10-Year Digital Solutions Partnership

    SLB and TotalEnergies enter into a 10-year collaboration to co-develop scalable digital solutions, focusing on enhancing energy resource access and efficiency through advanced AI technologies.

  • Shell (SHEL) Hits Pause on Major Biofuels Plant in Europe

    Shell (SHEL) remains committed to achieving its net-zero emissions target by 2050 despite abandoning several renewable projects to focus on its more profitable ventures, primarily in oil and gas.

  • BP CEO Halts Offshore Wind Projects, Enacts Hiring Freeze

    BP's new CEO Murray Auchincloss has implemented a hiring freeze and paused new offshore wind projects, shifting the company's focus to oil and gas to address investor concerns over its energy transition strategy.

  • Bitcoin Sinks Under $61K as One Trader Sticks to $150K Prediction This Year

    U.S.-listed ETFs ended a five-day inflow streak with $13 million in net outflows on Tuesday.

  • Why Paramount is back at the negotiating table with Skydance

    Shares of Paramount Global (PARA, PARAA) are rallying on revived merger talks with Skydance. According to reports, Skydance has reached a preliminary agreement to buy Shari Redstone's National Amusements, the controlling shareholder of Paramount. If that deal goes through, Skydance would then begin the merger process with Paramount Global. Bloomberg Intelligence senior media analyst Geetha Ranganathan joins Morning Brief to discuss the news and what it means for the media giant's future. "With Skydance, what we've constantly seen is that they are proposing a deal which basically favors Shari Redstone, who is the controlling shareholder, favors her over everybody else. So it favors her over class A shareholders as well as class B shareholders. And that is something that has the potential for attracting a lot of lawsuits. And that is something that has made Shari Redstone extremely wary, and so it looks like this time around, there is much stronger indemnification language in the agreement that should or could potentially protect her from a lot of the upcoming litigation," Ranganathan explains. Paramount has faced a rocky 6 months in its attempts to merge with Skydance, and Ranganathan believes that this deal comes with unique pressure: "The one thing that we have to remember is that the longer and longer this whole process kind of drags out, the less and the less value that the assets will have. And I think Shari Redstone realizes that she's been publicly negotiating for six months. That's something that's highly unusual in the media landscape, in any M&A deal for that matter, so for her to come that far and then just drop everything again, it created huge overhang on the stock. And I think she's realized that, which is why she's back at the negotiating table." For more expert insight and the latest market action, click here to watch this full episode of Morning Brief. This post was written by Melanie Riehl

  • Fed won't hit 2% target until 2026: Economist

    With somewhat cooling inflation and stagnant labor market growth, conversations about whether the Federal Reserve's interest rate cut timing persist. Interactive Brokers senior economist José Torres joins Market Domination to give insight into the labor market, the broader stock market, and the Fed's future policy decisions. "I think we're going to hit the Fed's 2% target somewhere in 2026. Fed Chair Powell was asked about it; he didn't think that we would hit it this year or next year. In fact, when we consider the disinflation that occurred last year in the second half, now those base effects become unfavorable into the second half of this year. So we're going to actually see core PCE start to tick higher. And if you look at the dots of summary of economic projections from the Fed, they're expecting core PCE to finish the year around 2.8," Torres tells Yahoo Finance. For more expert insight and the latest market action, click here to watch this full episode of Market Domination. This post was written by Nicholas Jacobino

  • London stocks, pound climb as Britons vote

    London's stock market and the pound advanced versus the dollar Thursday as Britons voted in a general election expected to be won by the centre-left and main opposition Labour party."Today's UK election looks unlikely to cause too many shockwaves given just how resounding the Labour party victory is expected to be, with markets feeling optimistic over the potential change at Downing Street," said Scope Markets analyst Joshua Mahony.

  • US market exceptionalism is approaching its dramatic denouement

    The investment focus naturally shifts to the US on Independence Day but more so than ever this year as the completion of elections here on Thursday and in France at the weekend moves the political spotlight across the Atlantic too.

  • Japan's Nikkei 225 index hits a record high close of 40,913.65

    Japan’s Nikkei 225 stock index closed Thursday at a fresh record high of 40,913.65, pushing past its most recent record close set in March on heavy buying of automaker and technology shares. The index's all-time high during intraday trading is 41,087.75, set on March 22. The gains tracked an overnight rally on Wall Street, where the S&P 500 and tech-heavy Nasdaq also hit fresh records.

  • Stocks Often Pop in July: Time to Buy These 4 ETFs?

    July is historically an upbeat month for the S&P 500 - here are some of our top ETF picks to ride the heat wave.

  • 16-year-old Chinese boy beat with iron rod on New Zealand bus

    On Friday morning, during the Maori New Year public holiday, a 16-year-old teen named Jason was brutally attacked on an Auckland bus by a woman wielding an iron rod. The assailant, described as a Maori woman “more than 200 kilograms," hit Jason multiple times and stabbed him in the face, knocking out five of his teeth, on board the bus after having allegedly shouted "ch*nk" at him at Johns Lane stop. Man intervenes: A 75-year-old Chinese man, Penglai Qiuyue, intervened and managed to grab the weapon, though he was also injured in the process.

  • Horrifying moment husband wheels suitcase containing murdered wife from home while carrying child

    A husband who strangled his wife in front of her two children and lover on a video call was captured wheeling the suitcase containing her body out of his home.