CFPB Enjoined From Implementing and Enforcing the Small Business Lending Data Collection Rules

By John Zasada, JD, CAMS – Shareholder, Financial Institutions Group

On Oct. 26, 2023, the U.S. District Court for the Southern District of Texas extended an existing injunction against the Consumer Financial Protection Bureau (CFPB) from implementing and enforcing Section 1071 of the Dodd-Frank Act (Regulation B Small Business Lending Data Collection Rule). The existing injunction for the rule only applied to Texas First Bank, Independent Bankers Association of Texas and Independent Community Bankers of America. Now all small business lenders nationwide, including credit unions, are covered by the injunction and do not currently have to comply with the final rule, which amounts to a probable pause on taking steps to prepare to comply. Note, the injunction is temporary. It lasts until the Supreme Court rules on the very constitutionality of the CFPB in the case of Community Financial Services Association of America Ltd. v. CFPB, the District Court rules, or the District Court decides to remove the preliminary injunction.

Doeren Mayhew’s regulatory compliance specialists will continue to monitor the injunction. To learn more about how this may impact your financial institution, contact us today.