U.S. District Court Grants Injunction on CFPB Section 1071 Final Rule
(AUSTIN, TEXAS) – The Texas Bankers Association (TBA) and co-plaintiffs, Rio Bank of McAllen, Texas, and the American Bankers Association (ABA), have been successful in their motion to halt implementation of the Consumer Financial Protection Bureau’s (CFPB) Section 1071 Final Rule. In an order released July 31, U.S. District Court Judge Randy Crane granted the plaintiffs’ Motion for Preliminary Injunction, sparing TBA and ABA members from having to devote time and resources complying with the rulemaking until the Supreme Court resolves a separate case involving the constitutionality of the CFPB’s funding.
Joint Statement on Injunction Blocking CFPB 1071 Final Rule
“The Texas Bankers Association, Rio Bank, and the American Bankers Association welcome this decision by the Southern District of Texas granting immediate and injunctive relief on CFPB’s 1071 Final Rule.
“We believe the injunction is a recognition of the complexity of the 1071 Final Rule and the significant costs and burdens it places on our members, particularly community banks which provide much of the country’s small business lending.
“While we sought an injunction covering all institutions covered by the rulemaking, this ruling spares TBA and ABA members across the country from being forced to incur unrecoverable expenses while the Supreme Court is considering whether the CFPB has the authority to promulgate the 1071 Final Rule at all.
“TBA, Rio Bank, and ABA are pleased with this immediate victory, but we remain committed to our larger case challenging the lawfulness and scope of CFPB’s over-reaching 1071 Final Rule that will only harm lending to small businesses and minority and women-owned enterprises. We look forward to the next steps in this case.”
The U.S. Supreme Court is scheduled to address the constitutionality of the CFPB's funding structure in its next term, with an expected decision by June 2024. The outcome of that case could have far-reaching implications for the banking industry and the regulatory landscape as a whole.
About Texas Bankers Association
Founded in 1885, the Texas Bankers Association is the largest state-based banking association in the US. TBA advocates for 400 of its member banks in Austin and Washington; trains more than 10,000 bankers annually; provides nationally recognized community bank services; and invests in Texas communities through financial literacy, scholarships, and charitable activities.
About Rio Bank
Rio Bank is a state-chartered community bank and Minority Depository Institution headquartered in McAllen, Texas. Rio Bank serves families and small business customers in the Rio Grande Valley and along the border in deep South Texas.
About the American Bankers Association
The American Bankers Association is the voice of the nation’s $23.7 trillion banking industry, which is composed of small, regional and large banks that together employ more than 2.1 million people, safeguard $18.7 trillion in deposits and extend $12.2 trillion in loans.