A U.S. court of appeals temporarily paused the Consumer Financial Protection Bureau’s 1071 small-business rule and extended its compliance deadlines until further notice, as advocated by ICBA.
Court Ruling: The U.S. Court of Appeals for the Fifth Circuit granted a request by ICBA and other plaintiffs to suspend implementation of the rule pending their ongoing legal challenge to the rule. In granting the motion to stay, the court ordered that “deadlines for compliance with the rule are hereby tolled,” or paused.
This is Compliance Content
CFPB Developments: The court case has been affected by recent executive developments at the CFPB. After President Donald Trump removed Rohit Chopra as CFPB director, the bureau’s counsel appeared at oral arguments but did not argue the case other than to seek a pause in the proceedings, ultimately saying they did not oppose the plaintiffs’ request for a delay.
Plaintiffs’ Arguments: ICBA and the other plaintiffs have argued that the court should set aside the CFPB’s rule because the bureau exceeded its statutory authority, relied on inaccurate and incomplete data to estimate costs, and improperly glossed over litigation and reputational damage costs.
Congressional Effort: House Small Business Committee Chairman Roger Williams (R-Texas) last week introduced ICBA-supported legislation to overturn the 1071 small-business data collection and reporting rule. The 1071 Repeal to Protect Small Business Lending Act would repeal the statute that underlies the CFPB rule.
Background: The CFPB’s rule requires lenders to collect and report data on credit applicants, including the race, sex, and ethnicity of the principal owners as well as gross annual revenue.