WASHINGTON—The Independent Community Bankers of America (ICBA), the Independent Bankers Association of Texas (IBAT), and Texas First Bank have filed a motion and complaint calling on a federal court to declare that the Consumer Financial Protection Bureau’s Section 1071 final rule is invalid and unenforceable and are seeking preliminary and permanent injunctive relief.
The CFPB’s 1071 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.
The credit union trade groups have raised similar objections to the CFPB rule.
In a motion to intervene and in a separate complaint filed with the U.S. District Court for the Southern District of Texas, the organizations argued that the limited injunctive relief the CFPB requested from the court, which was granted, “does not extend to all community banks.”
“Given the substantial burden that community banks and small-business customers across the country will face due to the 1071 rule,” the plaintiffs said they are broadly seeking injunctive relief for community banks not protected by the court’s prior injunction.
Letter to CFPB
In addition, the ICBA also sent a letter to the CFPB reiterating its call for the agency to stay the effective date of its 1071 rule for all covered financial institutions pending a court challenge to the constitutionality of the Bureau’s funding structure.
As CUToday.info has reported, the Supreme Court this year agreed to review the U.S. Court of Appeals for the Fifth Circuit’s October 2022 decision that the CFPB’s funding structure violates the Constitution’s appropriations clause and separation of powers.
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