Sec. 1071 compliance date adjustments announced

When TBA and McAllen-based Rio Bank sued the CFPB on April 26, 2023, the suit alleged that the Sec. 1071 Final Rule promulgated by the Consumer Financial Protection Bureau was unconstitutional because the Final Rule was promulgated by an unconstitutionally funded agency and because the Bureau failed to follow the Congressionally passed Administrative Procedure Act when it promulgated the Final Rule.

Last July, U.S. District Court Judge for the Southern District of Texas agreed with TBA, Rio Bank and the ABA, a subsequent co-plaintiff, and issued a preliminary injunction staying the implementation of the Final Rule until the U.S. Supreme Court issued an opinion on the Bureau’s funding structure.

The U.S. Supreme Court, with its Community Financial decision, upheld the funding structure of the CFPB thereby ending the compliance stay provided by the preliminary injunction.

Since 290 days have passed since Judge Crane issued the preliminary injunction requested by TBA, Rio Bank and ABA on July 31, 2023, the CFPB now plans to issue an interim final rule to extend compliance deadlines.