Section 1071

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We recently reported that a federal district court in Kentucky enjoined the CFPB from implementing the small business data collection and reporting rule, also referred to as the 1071 rule based on the Dodd-Frank section requiring the rule (the “Rule”). Unlike a similar injunction against the rule issued by a federal district court in Texas, the preliminary injunction issued by the Kentucky court is not limited to the members of the plaintiff trade associations and the plaintiff banks.… Continue Reading

On September 14th, the Federal District Court for the Eastern District of Kentucky granted the plaintiff’s motion to preliminarily enjoin the CFPB from implementing the Small Business Lending Rule (“Rule”) promulgated under section 1071 of the Consumer Financial Protection Act. As a reminder, the plaintiffs in the Kentucky lawsuit are the Kentucky Bankers Association and several Kentucky banks.… Continue Reading

Last week, three farm credit trade associations filed the latest in a series of unopposed emergency motions for leave to intervene in the Texas case challenging the Consumer Financial Protection Bureau’s (“CFPB”) final small business lending rule implementing Section 1071 of the Dodd-Frank Act (Rule). The intervenors – the Farm Credit Council, Texas Farm Credit, and Capital Farm Credit (collectively, “Farm Credit Intervenors”) – argue that the Rule imposes substantial burdens on agricultural lenders and the institutions that support them, and that the members they represent will suffer disproportionately, as the majority of their loans go to small businesses, such as farmers, ranches, and agribusinesses, covered by the Rule.… Continue Reading

Yesterday, we blogged about the opinion issued on September 8 by the Federal District Court for the Eastern District of Texas in the lawsuit brought last year by several trade associations against the CFPB. In that lawsuit, the trade associations challenged changes made by the CFPB to its UDAAP Exam Manual in March, 2022 to encompass discrimination claims within the “unfairness” prong even when such claims go well beyond the scope of the Equal Credit Opportunity Act.… Continue Reading

As we predicted long ago, on Friday, September 8, 2023, the Federal District Court for the Eastern District of Texas vacated the changes made in March 2022 to the CFPB’s Exam Manual. On that date, the CFPB purported to use its authority to prohibit unfair, deceptive, or abusive acts or practices (UDAAPs) to target discriminatory conduct, even where fair lending laws may not apply.… Continue Reading

The CFPB has filed its opposition to the motion for a preliminary injunction filed by the plaintiffs in the Kentucky federal court lawsuit challenging the CFPB’s final small business lending rule (Rule).

The plaintiffs in the Kentucky lawsuit are the Kentucky Bankers Association and several Kentucky banks.  The Kentucky plaintiffs chose to file a separate lawsuit rather than intervene in the lawsuit pending in a Texas federal district court challenging the Rule filed by the American Bankers Association, Texas Bankers Association, and Rio Grande Bank and in which several credit unions, community banks, credit union and community bank trade associations, an auto floor plan lender, and a trade association for financial services companies and manufacturers in the equipment finance sector have already intervened and filed preliminary injunction motions. … Continue Reading

This past Thursday, August 31, another preliminary injunction motion was filed in the Texas lawsuit challenging the CFPB’s small business lending rule (Rule).  The latest motion was filed by XL Funding, LLC d/b/a Axle Funding, LLC (Axle) and the Equipment Leasing and Finance Association (ELFA) (collectively, the ELFA Intervenors), following the court’s entry of an order granting their motion for leave to intervene and their filing of an intervenor complaint. … Continue Reading

A group of trade associations has sent a letter to CFPB Director Chopra urging the CFPB to address the disparity that has resulted from the order entered by the Texas federal district court in the lawsuit challenging the CFPB’s small business lending rule that granted preliminary injunctive relief only to the plaintiffs and their members. … Continue Reading

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).… Continue Reading

The CFPB has filed its opposition to the motion for a preliminary injunction filed by the intervenors in the Texas federal court lawsuit challenging the CFPB’s final small business lending rule (Rule).  The intervenors are several credit unions, community banks, and credit union and community bank trade associations.

In the Texas lawsuit, the court entered an order on July 31 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.… Continue Reading