Appellants' Emergency Motion for Injunction Pending Appeal and Administrative Stay

INTRODUCTION AND NATURE OF EMERGENCY

Plaintiffs, the Chamber of Commerce of the United States of America, Fort Worth Chamber of Commerce, Longview Chamber of Commerce, American Bankers Association, Consumer Bankers Association, and Texas Association of Business, respectfully request emergency relief from this Court to address the irreparable harm inflicted on Plaintiffs and their members by a rule promulgated by the Consumer Financial Protection Bureau (CFPB). Plaintiffs are faced with highly unusual circumstances, which never would have arisen but for the CFPB’s decision to rush the effective date of the rule governing credit card late fees, Credit Card Penalty Fees (Regulation Z) [hereinafter the “Final Rule” or “Rule”]. App.012-107.

The CFPB violated a statutory requirement that it allow at least six months to implement a rule like the one at issue here, 15 U.S.C. § 1604(d), and instead gave Plaintiffs’ members only 60 days to comply. In light of the irreparable harm inflicted on Plaintiffs’ members, Plaintiffs sought a preliminary injunction to stay the fastapproaching effective date of the Rule. Plaintiffs now appeal the effective denial of their motion for a preliminary injunction and respectfully ask this Court for an administrative stay of the rule and, ultimately, an injunction pending appeal. The CFPB has not contested that binding precedent of this Court gives the Plaintiffs a likelihood of success on the merits of their challenge under the Appropriations Clause. Nor has the CFPB contested that, absent an injunction, Plaintiffs’ members will suffer irreparable injury, including in the form of substantial and accelerating compliance costs before the 60-day effective date for the Rule. Unfortunately, this emergency manufactured by the CFPB nevertheless has realworld consequences for Plaintiffs’ members, which necessitate bringing this emergency request.

Plaintiffs originally filed suit and a preliminary injunction motion on March 7, 2024, two days after the rule was finalized. The district court then granted Plaintiffs’ request for an expedited briefing schedule on the motion. Unfortunately, the district court has not decided the preliminary injunction motion. The district court, instead, sua sponte invited the CFPB to file a motion for discretionary transfer of venue under 28 U.S.C. § 1404(a) because only one of the Plaintiffs resides in the Fort Worth Division in which they filed suit. Plaintiffs asked the district court to resolve their preliminary-injunction motion before ordering any discretionary transfer, and in all events by Friday, March 22, 2024, to avoid the irreparable harm that would be caused by further delay and preserve their opportunity for timely appellate review in this Court if necessary to address such harm. The district court denied that request and did not act on the preliminary-injunction motion. Plaintiffs thus must respectfully ask this Court for an administrative stay of the rule and, ultimately, an injunction pending appeal. 

By declining to rule on Plaintiffs’ fully briefed motion for a preliminary injunction before resolving a discretionary issue of venue, despite the uncontested and ongoing irreparable harm, the district court has effectively denied Plaintiffs’ motion. If the district court grants a discretionary motion for transfer, resolution of Plaintiffs’ motion will be inevitably delayed by both the process of having a new judge prepare to decide the motion and the uncertainty that will be created by any mandamus proceedings related to that transfer. Indeed, if the case were transferred out of the Circuit, Plaintiffs are not even sure that they would be able to obtain appellate review of the transfer, let alone of the denial of their preliminary injunction motion, in this Court before the effective date. And if the district court declines the discretionary motion for transfer, more than a week of additional increasing compliance costs will have occurred, with no certainty as to when, if ever, the district court will turn to Plaintiffs’ motion. A decision in the near term seems not only unlikely, but foreclosed. App.308. And with every day that passes, the Rule’s effective date ticks closer and the irreparable harm to Plaintiffs’ members grows.

Plaintiffs’ members will continue to suffer irreparable harm absent this Court’s intervention. As explained at length in the papers below, the Final Rule requires credit card issuers representing 95% of the market to update the printed and electronic disclosures that are distributed to each new credit card user in this country and millions of periodic disclosures to existing cardholders. Because approving new disclosure language and ordering new materials takes months, credit card issuers covered by the Final Rule must begin that costly process now. Further, to the extent that credit card issuers want to accept the CFPB’s invitation to modify other terms of their credit cards to mitigate the losses they will face under the Rule, they must provide written notice of those changed terms to customers 45 days in advance of any such change. To time those changes with the Final Rule’s May 14, 2024 effective date, such notices would need to be received by customers by March 29, 2024. But, of course, if such notices are sent and then the Rule were to be enjoined, reversing course would cause immense customer confusion, potential loss of customer goodwill, and millions of dollars of costs for new notices.

In light of these unusual circumstances, Plaintiffs respectfully request an injunction pending appeal of the effective denial of their motion for preliminary injunction and an immediate administrative stay to afford this Court time to consider their motion.

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