The rule limiting late fees on credit cards to $8 has been suspended. Here’s what this means for you

The US banking industry has scored a major victory in its attempt to block the implementation of a new law Consumer Financial Protection BureauA rule that would have drastically limited the fees that credit card companies can charge for late payments.

A federal court said this late Friday approved the industry’s last-minute legal attempt to pause the implementation of a regulation announced in March and set to come into effect on Tuesday.

In his orderJudge Mark Pittman of the Northern District of Texas sided with plaintiffs, including the U.S. Chamber of Commerce, in their lawsuit against the CFPB, saying they had faced hurdles in arguing for a preliminary injunction to freeze the rule.

The result, at least for now, preserves an important revenue stream for the U.S. card industry. The CFPB estimates that the rule would have saved American families $10 billion a year’s worth of fees paid by those who are behind on their bills. It would limit late fees, which are typically $32 per incident, to $8 per incident and limit the industry’s ability to increase fees.

It is now unclear when and if the new arrangement will come into effect.

“Consumers will incur $800 million in late payments each month if the rule is delayed — money that would cover the profit margins of the largest credit card issuers,” a CFPB spokesperson told CNBC on Friday.

The industry’s lawsuit is an attempt to block a scheme “to continue making tens of billions of dollars in profits by charging borrowers late fees that far exceed their actual costs,” the spokesperson said.

The CFPB has done that said The industry has taken advantage of borrowers with low credit scores by charging them increasingly high late fees over the past decade, while trade groups have argued that the rate caps are a misguided effort. redistributes costs for those who pay their bills on time.

The Consumer Bankers Association, one of the groups that sued the CFPB, said it was “pleased with the district court’s decision to issue a preliminary injunction preventing the CFPB’s credit card late fee rule from coming into effect next comes into effect this week.”

The CBA said it will continue to press its case in the courts on why the CFPB rule should be “completely thrown out.”