Two joint resolutions under the Congressional Review Act (CRA) to override the CFPB’s final Section 1071 small business lending rule have been introduced by Republican members in the House.  The resolutions are H.J. Res. 50 introduced on April 3, 2023 and H.J. Res. 66 introduced on May 31, 2023.  (Since the two resolutions and their sponsors are identical, except that H.J. Res. 66 includes a citation to the final rule as published in the Federal Register, it would seem that H.J. Res. 66 was intended to supersede H.J. Res. 50.)  The CRA is the vehicle used by Congress to overturn the CFPB’s arbitration rule and the OCC’s true lender rule.

The CFPB’s final Section 1071 rule was published in the Federal Register on May 31, 2023 and is effective on August 29, 2023.  The rule contains a tiered compliance date schedule, with an earliest compliance date of October 1, 2024 for financial institutions that originate the most covered credit transactions and later compliance dates for institutions with lower transaction volumes.

To be eligible for the special Senate procedure that allows a CRA disapproval resolution to be passed with only a simple majority, the Senate must act on a resolution during a period of 60 “session days” which begins on the later of the date when the rule is received by Congress and the date it is published in the Federal Register.  The Congressional Record indicates that the Section 1071 rule was received by the House on May 31, 2023.  It is not clear if the rule must also be referred to the Senate to trigger the running of the 60 session day period.

A lawsuit challenging the final Section 1071 rule was filed in April 2023 in a Texas federal district court.  The plaintiffs are two trade groups and a Texas bank.