WASHINGTON—A U.S. Court of Appeals has temporarily paused the Consumer Financial Protection Bureau’s 1071 small-business rule and extended its compliance deadlines until further notice, the Independent Community Bankers of America reported, citing their support for the decision.
The U.S. Court of Appeals for the Fifth Circuit has granted a request by ICBA and other plaintiffs to suspend implementation of the rule pending their ongoing legal challenge to the rule, ICBA said.
In granting the motion to stay, the court ordered that “deadlines for compliance with the rule are hereby tolled,” or paused.
ICBA said the court case has been affected by recent executive developments at the CFPB.
“After President Donald Trump removed Rohit Chopra as CFPB director, the Bureau’s counsel appeared at oral arguments but did not argue the case other than to seek a pause in the proceedings, ultimately saying they did not oppose the plaintiffs’ request for a delay,” ICBA stated.
ICBA and the other plaintiffs have argued that the court should set aside the CFPB’s rule because the Bureau exceeded its statutory authority, relied on inaccurate and incomplete data to estimate costs, and improperly glossed over litigation and reputational damage costs, ICBA added.
The CFPB’s 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.