The financial policy saga to watch this week is unfolding in Fort Worth, where a Trump-nominated federal judge is giving the CFPB unexpected support in a brawl with banks. At issue in the fight is a new CFPB rule that would cap credit card late fees at $8, down from $32. With billions of dollars on the line, industry groups including the U.S. Chamber of Commerce and the American Bankers Association quickly sued the bureau after the rule was finalized on March 5, accusing it of exceeding its authority and advancing policy that was driven more by politics than economics. They took the CFPB to court in Texas, which the agency immediately blasted as “forum shopping.” While Fort Worth may be home to the world’s largest honky tonk (which MM can recommend if you’re into that kind of thing), the CFPB argues it’s not the headquarters for any of the major banks impacted by the rule. All of the above was expected. But the quick smackdown that ensued from District Judge Mark Pittman was not, and it’s raising fresh questions about the business world’s legal tactics as trade groups ramp up litigation against Biden-era regulations. In a stunning move, Pittman last week rejected a request by the banking trade groups to quickly pause the rule before it takes effect on May 14. Lawyers for the banks had argued that an immediate halt was necessary because of the time and effort it would take to print and issue new disclosures. Pittman was unmoved. In a two-page order, he all but scolded the business groups for their “efforts to educate the court on what they believe the court does and does not need.” He also gave a nod to concerns about his Texas district becoming a magnet for litigation, noting that it saw more than 7,000 filings last year, compared to nearly 4,500 in the District of Columbia. "Given these statistics, the court does not have the luxury to give increased attention to certain cases just because a party to the case thinks their case is more important than the rest," he wrote. Pittman drafted the order just days after the Judicial Conference of the United States announced new steps to combat judge-shopping. As the Congressional Research Service highlighted in a report last week, there’s a new focus on the issue because of the growing prevalence of emergency litigation and nationwide injunctions against government actions. This week, analysts expect Pittman to decide on whether the case should stay in Fort Worth or be moved to the nation’s capital, where the CFPB, Chamber and ABA are based. Pittman signaled skepticism about keeping it in his court last week when he wrote that there “appears to be an attenuated nexus to the Fort Worth Division.” (The Fort Worth Chamber of Commerce is one of the plaintiffs.) It's shaping up to be another potential blow to the banks. BTIG director of policy research Isaac Boltansky told clients in a note this weekend that the industry will probably either stay in front of an “antagonized judge” or the case will be moved to a “less ideologically sympathetic jurisdiction.” Boltansky said the high conviction that the rule would be put on hold appears to have been misplaced “given the combination of industry's execution failure in court coupled with a healthy serving of bad luck.” “We are still in the early innings of this litigation,” he said. “But it has not started the way anyone expected.” Happy Monday — Send tips to zwarmbrodt@politico.com.
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