On Friday, May 10, 2024, the Citizens for Responsibility and Ethics in Washington (CREW) published an article expressing concerns about a federal judge ruling on a case involving credit card fees.

According to the article, the Consumer Financial Protection Bureau (CFPB) recently issued a new rule capping late payment fees on credit cards at $8. This is down from an average of $32 previously charged. The rule is estimated to save American consumers around $10 billion in total. Most of these savings would benefit Black, brown, and low-income credit card holders.

However, several banking industry trade groups including the American Bankers Association filed a lawsuit to block the CFPB rule from taking effect. The case was assigned to Judge Don Willett of the Fifth Circuit Court of Appeals. CREW argues Judge Willett should have recused himself due to a potential conflict of interest. Financial disclosures show the judge owns up to $30,000 of stock in Citigroup.

Citigroup is the fourth-largest bank in the U.S. and third-largest credit card issuer. The company notified shareholders including Judge Willet that the new CFPB rule would reduce credit card fee revenue. One industry analysis stated Citigroup stood to lose more money from the rule than any other financial institution. Further, Citigroup is a member of three of the banking industry associations behind the lawsuit against the CFPB.

Despite these connections, Judge Willett refused to recuse and has already made procedural rulings in the case. A panel of judges reviewed the issue but found no requirement for him to step aside under current ethics rules. However, CREW argues his financial stake in Citigroup creates at least the appearance of a conflict of interest that undermines public trust in the judiciary.

CREW cited other recent examples of judges ruling on cases involving their own financial ties. The organization has long advocated strengthening ethics guidelines, like passing legislation to expand when federal judges must remove themselves from a case. With the troubling frequency of these situations continuing, CREW argues decisive action is needed to ensure fair and impartial rulings for all parties that appear before the federal courts.



Source: CREW