The 5th Circuit Court of Appeals has stayed the transfer of a lawsuit challenging the Consumer Financial Protection Bureau’s $8 late fee rule until late Tuesday pending the outcome of a hearing on whether the transfer of the case to D.C. District Court effectively denies the plaintiffs’ motion to postpone the effective date of the rule.
A judge in the District Court for the Northern District of Texas Friday
But the plaintiffs — including the U.S. Chamber of Commerce, American Bankers Association and Consumer Bankers Association — filed a motion with the 5th Circuit asking it to decide whether the case’s transfer amounted to a denial of a pending motion for an injunction against the rule, which is slated to go into effect on May 14.
“Plaintiffs respectfully request that this Court maintain its existing briefing schedule regarding Plaintiffs’ emergency motion for an injunction pending appeal and administrative stay regarding the effective denial of their motion for a preliminary injunction,” the plaintiffs’ motion reads. “Plaintiffs respectfully ask for a ruling before the U.S. District Court for the District of Columbia dockets the case.”
The 5th Circuit issued a brief order staying the case’s transfer until 5 p.m. Tuesday, after a hearing scheduled for earlier in the day on the validity of the plaintiffs’ arguments.
The rule, which was
The CFPB said in a reply to the plaintiffs’ motion that the 5th Circuit does not have the jurisdiction to hear the appeal because the lower court did not rule against plaintiffs in its decision to transfer the case to the D.C. District Court.
Instead, that motion will be heard in due course by the D.C. District Court, and transferring the case to another court cannot and should not be construed as denial, the agency argued. Further, the bureau said that regulations only require banks to issue notices to their customers 45 days before the effective date of increased fees, not reduced fees. For that reason, the bureau said, there is no harm imposed by the transfer that would justify the 5th Circuit’s review.
“Courts of appeals have jurisdiction over appeals from ‘interlocutory orders of the district courts … refusing … injunctions,'” the CFPB said. “There is no such order here. There is no emergency in this case that requires a faster decision or that entitles Plaintiffs to run straight to this Court before the appropriate district court resolves their motion.”