Judge rules in favor of bank over credit card fees
First Premier Bank and Premier Bankcard recently won a court decision over the ability to charge upfront fees to consumers opening new credit card accounts, according to a report from the Sioux Falls Argus Leader. The decision, which put a preliminary injunction on a change to federal regulations, could have wide-reaching implications in the lending industry.
U.S. District Judge Karen Schreier handed down the decision based on the fact that she believed the Federal Reserve Board overstepped its authority, the report said. The bank argued successfully that it charged fees to some riskier consumers for opening credit card accounts. The rule would have restricted those fees to 25 percent of the card’s limit, and First Premier argued it would lose about $1 million as a result.
The regulation was part of the Credit Card Accountability, Responsibility and Disclosure Act, which was designed to help protect consumers from predatory lending practices, but has drawn the ire of the banking industry.