As discussed here, earlier this month the Consumer Financial Protection Bureau (CFPB or Bureau) finalized its credit card late fee rule (Final Rule). The Final Rule sets a safe harbor amount for late fees at $8 and eliminates the annual inflation adjustments to that safe harbor amount, for larger card issuers, among other changes. The announcement of the Final Rule on credit card late fees sparked immediate reaction. As discussed here, a collective of trade groups, including the U.S. Chamber of Commerce, Fort Worth Chamber of Commerce, Longview Chamber of Commerce, the American Bankers Association, the Consumer Bankers Association, and Texas Association of Business (collectively, the trade groups) filed a complaint in the U.S. District Court for the Northern District of Texas challenging the Final Rule and arguing that it should be invalidated because the CFPB’s funding mechanism violates the Appropriations Clause of the U.S. Constitution. Alternatively, the trade groups argue that the Final Rule violates the Administrative Procedure Act for various reasons. Concurrently with the complaint, the trade groups filed a motion for preliminary injunction requesting that the court enjoin the Bureau from implementing the Final Rule against their members until the conclusion of the case.

Now the trade groups’ chosen venue for the lawsuit and their pending motion for preliminary injunction is in question. Yesterday, the district court issued an order raising concerns about whether the Fort Worth Division of the Northern District of Texas is the proper venue for the suit. “The Court is weary that there appears to be an attenuated nexus to the Fort Worth Division, given only one plaintiff of the six in this matter has even a remote tie to the Fort Worth Division.”

The trade groups have until March 21, 2024, to explain the case’s connection to the division. Alternatively, the court invited the CFPB to notify the court today if it intends to file a motion to transfer venue by March 21.

Troutman Pepper will continue to monitor the progress of this litigation, and we will report on any significant developments.