Fort Worth, Texas – A federal judge in Texas made a significant ruling on Thursday regarding a lawsuit filed by major banking industry groups and the U.S. Chamber of Commerce against the Consumer Financial Protection Bureau (CFPB). The judge accused the groups of engaging in venue shopping in an attempt to secure a favorable outcome, ultimately siding with the federal regulator.

The lawsuit in question revolves around the CFPB’s new regulations on credit card late fees, which aim to cap the average late fee for customers at $8, down from the current average of $32. The major banking groups chose to file their lawsuit in the U.S. District Court in the Northern District of Texas, a jurisdiction known for its historically conservative judges.

Judge Mark Pittman, in his ruling, highlighted the lack of significant ties between the banking industry and the Fort Worth division, where the lawsuit was initially filed. He declared that the lawsuit should be transferred to Washington, D.C., where the CFPB is headquartered and where there is a more substantial legal infrastructure to handle such cases.

The CFPB argued that Texas was an inappropriate venue for a banking industry regulation lawsuit, emphasizing that Washington, with its proximity to regulators and expertise in industry regulation law, was the more suitable location. The Biden administration’s stance was supported by Judge Pittman, who found merit in the argument.

The banks, which stand to lose billions in revenue from credit card late fees if the new regulations are upheld, have been vigorously opposing the rule. The bureau estimates that banks collect approximately $14 billion annually from credit card late fees, making it a significant source of revenue.

The major industry groups involved in the lawsuit, including the American Bankers Association, Consumer Bankers Association, and U.S. Chamber of Commerce, have yet to provide comment on the ruling. However, the decision marks a crucial victory for the CFPB and the Biden administration in their efforts to regulate the financial industry.

By transferring the case to Washington, the judge’s ruling aligns with the CFPB’s intentions of ensuring fair and effective regulation in the banking sector. This development underscores the importance of venue selection in legal proceedings and the impact it can have on the outcome of significant regulatory disputes.