08:08 AM EDT, 05/13/2024 (MT Newswires) -- (Updates with a response from the Consumer Financial Protection Bureau in the last paragraph.)

A federal judge on Friday temporarily stopped an attempt by President Joe Biden's administration to cap late fees for credit card payments at $8 beginning this week.

US District Judge Mark Pittman in Texas granted an injunction against the implementation of the Consumer Financial Protection Bureau rule. The block was sought by pro-business groups including the US Chamber of Commerce and the American Bankers Association. The ruling affects the revenue of banks and credit card companies that charge consumers large late fees for their Mastercard ( MA ) or Visa (V) bills, including Capital One Finance (COF).

The judge, appointed by President Donald Trump, said the court was bound to void the implementation of the payment cap citing a 2022 ruling by an appellate court that found funding for the Consumer Financial Protection Bureau was unconstitutional. That ruling is currently being reviewed by the Supreme Court.

Biden has called late payment penalties of $30 or more charged on top of credit card interest interest "junk" fees.

A spokesperson for the Consumer Financial Protection Bureau said its rule was in accord with laws passed more than a decade ago by Congress and vowed to continue defending it. "The credit card lobby's lawsuit is an attempt to derail a rule that will save families $10 billion each year in order to continue making tens of billions of dollars in profits by charging borrowers late fees that far exceed their actual cost," the spokesperson said in a statement shared with MT Newswires. "Consumers will shoulder $800 million in late fees every month that the rule is delayed."

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