Credit card companies allowed to continue charging junk fees by Daines-backed judge - TAI News
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Senator Steve Daines (R-MT) speaks to media during the weekly Senate Republican Leadership press conference, at the U.S. Capitol, in Washington, D.C., on Wednesday, March 6, 2024. (Graeme Sloan/Sipa USA)(Sipa via AP Images)

A federal judge who is preventing the federal government from implementing a new rule that would prohibit credit card companies from charging consumers more than $8 in late fees, among the excessive charges known as junk fees, received key backing from Montana Republican U.S. Sen. Steve Daines.

On May 10, U.S. District Judge Mark Pittman granted a preliminary injunction in favor of a group of banks and businesses that sued the Consumer Financial Protection Bureau to block the rule.

The federal rule, finalized by the agency on March 5, would have reduced late fees from a typical cost of $32 to $8. The agency has estimated that more than 45 million people currently subject to late credit card fees would save an average of $220 per year.

“It is disappointing that the court has granted this last-ditch effort by the banks to prevent these critical limits on credit card late fees from going into effect next week,” Chuck Bell, the advocacy program director for Consumer Reports, said in a statement. “Credit card companies have been bilking consumers out of billions of dollars in excessive late fees for far too long.”

Pittman was nominated to the federal court in 2019 by former President Donald Trump. His nomination was backed mostly by Republicans, who held the majority at the time. Only two members caucusing with Democrats, West Virginia Sen. Joe Manchin and Arizona Sen. Kyrsten Sinema (who later left the Democratic Party), backed his nomination.

Montana’s Senate delegation split its vote, with Sen. Jon Tester, the state delegation’s only Democratic member, opposing the nomination and Daines voting in favor.

Daines has backed the credit card and banking industry’s agenda in Congress while receiving thousands in donations from them.

Daines is one of 15 co-sponsors of a joint resolution currently pending in the Senate that would express official disapproval of the CFPB rule.

In April 2023, Daines was a signatory to a letter from Senate Republicans to CFPB Director Rohit Chopra expressing their disagreement with the credit card rule. The senators referred to the fees charged by credit card companies as “commonsense incentives that promote financial responsibility” and called other actions by the agency to limit banking fees part of an “unfair initiative.”

According to an analysis of campaign contributions by the government watchdog group Accountable.US, Daines has received over $89,000 in donations from three banking industry groups that oppose the new rule, the American Bankers Association, the Consumer Bankers Association, and the Independent Community Bankers of America.

During his eleven years in Congress, Daines has received over $131,000 in donations from eight of the largest companies that issue credit cards.

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