Yet another unopposed emergency motion for leave to intervene has been filed in the Texas lawsuit challenging the CFPB’s final small business lending rule (Rule).  The latest proposed intervenors are XL Funding, LLC d/b/a Axle Funding, LLC (Axle) and the Equipment Leasing and Finance Association (ELFA) (collectively, the Proposed ELFA Intervenors).

The motion filed by the Proposed ELFA Intervenors describes ELFA as a national trade association that represents financial services companies and manufacturers in the equipment finance sector.  It states that ELFA’s members are companies that “finance the acquisition of assets, including without limitation, all types of capital equipment; software; agricultural equipment; IT equipment and software; aircraft; manufacturing and mining machinery; rail cars and rolling stock; vessels and containers; trucks and transportation equipment; construction and off-road equipment; motor vehicles; business, retail, and office equipment; and medical technology and equipment.”  The motion describes Axle as a floorplan lender that provides financing for motor vehicle dealers.  (While the Rule does not cover leases, it does apply to nonbank lenders involved in equipment and vehicle financing and commercial finance companies.)

The Complaint in Intervention that the Proposed ELFA Intervenors intend to file if granted leave to intervene tracks the Appropriations Clause and Administrative Procedure Act violations alleged in the plaintiffs’ complaint.  (The plaintiffs are the American Bankers Association, Texas Bankers Association, and Rio Grande Bank.)  The Proposed ELFA Intervenors state in their motion that, if granted leave, they intend to immediately file a motion for preliminary injunction to obtain the same preliminary relief the Texas federal court has granted to the plaintiffs.  On July 31, the court entered an order that preliminarily enjoins the CFPB from implementing and enforcing the Rule “pending the Supreme Court’s reversal of [Community Financial Services Association of America Ltd. v. CFPB], a trial on the merits of this action, or until further order of this Court,” stays the deadlines for compliance with the Rule’s requirements pending the Supreme Court’s decision in CFSA, and extends the deadlines for compliance in the event of a reversal in CFSA.  At the CFPB’s urging, the court unfortunately denied the nationwide relief requested by the plaintiffs and only granted relief to the plaintiffs and their members. 

The Texas federal court has already granted the motions for leave to intervene filed by community bank and credit union intervenors and the community bank intervenors have filed a preliminary injunction motion in which the credit union intervenors have joined.  In their preliminary injunction motion, the community bank and credit union intervenors ask the Texas federal court to enter a preliminary injunction prohibiting the CFPB from enforcing the Rule nationwide or, alternatively, as to the intervenors and their members.  Despite having already lost the argument that preliminary relief is not warranted as to the plaintiffs, the CFPB has opposed the intervenors’ preliminary injunction motion.

The motion for leave to intervene filed by the Proposed ELFA Intervenors includes a certification from their counsel stating that he conferred with counsel for the CFPB and the plaintiffs and was advised that they are unopposed to the motion.  We assume however, that if the Proposed ELFA Intervenors are granted leave to intervene, the CFPB will also oppose their preliminary injunction motion.