April 18 (Reuters) - A federal appeals court judge whose

son owns Citigroup ( C/PN ) stock does not need to recuse himself from

hearing a lawsuit by banking industry groups challenging a rule

capping credit card late fees at $8, a judicial ethics panel has

concluded.

That determination was contained in an advisory opinion from

the panel that was made public on Wednesday concerning whether

those stock holdings meant U.S. Circuit Judge Don Willett must

withdraw from hearing the challenge to the U.S. Consumer

Financial Protection Bureau's new rule.

Willett, a member of the 5th U.S. Circuit Court of Appeals,

turned to the U.S. Judicial Conference's Committee on Codes of

Conduct for guidance after the CFPB had argued that large credit

card issuers such as Citi had a financial interest in the

outcome of the case that might warrant a judge's recusal.

The agency raised its concern three days after Willett, an

appointee of Republican former President Donald Trump, wrote a

2-1 opinion on April 5 holding that a trial judge wrongly

transferred the case from Fort Worth, Texas, to Washington, D.C.

Politico had after the ruling reported on Willett's interest

in Citi, the nation's second-largest credit card issuer and a

member of the U.S. Chamber of Commerce and American Bankers

Association, two groups challenging the CFPB rule.

Willett in response to that article said that investment

comprised about $2,000 worth of Citigroup ( C/PN ) stock held in his

son's Coverdell education savings account.

Willett is also set to be part of the three-judge panel that

will hear a related request by the groups to block the rule, and

his recusal would have shifted who would decide the matter.

But U.S. District Judge Gerald McHugh, serving as the acting

chair of the Committee on Codes of Conduct, in the advisory

opinion said the potential impact of the case on Citi's stock

was, at best, "indirect and contingent."

"Even if it is true that the value of your son's stock could

be affected by market forces based upon the outcome of this

case, that does not by itself convert your son's stock ownership

to a direct financial interest requiring recusal," McHugh wrote.

The CFPB had no immediate comment. The Chamber of Commerce

did not respond to a request for comment.

At issue is a CFPB rule targeting what the agency has called

"excessive" fees credit card issuers charge for late payments,

which it estimated costs consumers $12 billion per year.

Under that rule, credit card issuers with more than 1

million open accounts can only charge $8 for late fees, unless

they can prove higher fees are necessary to cover their costs.

Issuers previously could charge up to $30 or $41 for subsequent

late payments.

The case is Chamber of Commerce of the United States of

America, et al, v. Consumer Financial Protection Bureau, 5th

U.S. Circuit Court of Appeals, No. 24-10248.

For the plaintiffs: Michael Murray of Paul Hastings

For the CFPB: Justin Sandberg of the CFPB

Read more:

US court rejects transfer of credit card fees rule case amid

focus on 'judge shopping'

Texas judge transfers lawsuit over card fees to Washington,

D.C.

US judiciary says courts have discretion to adopt 'judge

shopping' policy

Judge recuses from CFPB credit card fee rule case; conflicts

raised

US regulator says trade groups judge-shopped for credit fee

lawsuit

US consumer agency sued by banks, US Chamber over credit

card late fee cap

Biden caps credit card late fees at $8, probes US healthcare

takeovers

(Reporting by Nate Raymond in Boston)