CORPUS CHRISTI, Texas–CUNA, the Cornerstone league and Rally Credit Union filed to join an Emergency Motion for Preliminary Injunction in the U.S. District Court for the Southern District of Texas, seeking relief for credit unions from implementation of the Consumer Financial Protection Bureau’s section 1071 rule.
The court previously issued a preliminary injunction for the rule, but it applies only to American Bankers Association and Texas Bankers Association members and Rio Bank. As CUToday.info reported here, the court granted the credit union motion to intervene on Aug. 14.
‘Questions on Impact’
“CUNA, Cornerstone, and Rally seek expansion of the injunction to apply to credit unions, and all financial institutions covered by the rule. There are questions about this rule’s impact on the ability of credit union to serve small businesses, not to mention the current questions about the bureau’s constitutionality,” CUNA President/CEO Jim Nussle said in a statement. “Credit unions nationwide deserve the same relief granted to banks, especially since the CFPB itself noted in the final rule that smaller financial institutions will face difficulties complying with the rule in a timely manner.”
CUNA, Cornerstone, and Corpus Christi, Texas-based Rally each detailed the substantial cost and impact of the 1071 rule in support of the filing.
What Rule Would Do
As CUToday.info has reported, the 1071 rule—finalized in March—requires credit unions to collect and report certain data on applications for credit for women-owned, minority-owned, and small businesses.
CUNA, along with NAFCU and other financial services organizations, have maintaied the overly broad scope of the rule will raise the cost of small business borrowing and require burdensome data collection.