Senators urge CFPB to grant nationwide stay of 1071 rule

Sen. John Kennedy (R-La.) and seven other Senate Banking Committee members asked the Consumer Financial Protection Bureau to issue a nationwide stay of its Section 1071 rule amid a pending court challenge.

Details: In a letter to the CFPB, the senators noted that the limited injunctive relief that the CFPB requested and the U.S. District Court for the Southern District of Texas granted to the parties in TBA v. CFPB does not extend to many community banks.

Recent Court Filings: ICBA, the Independent Bankers Association of Texas, and Texas First Bank recently asked the court for a preliminary injunction prohibiting the CFPB from enforcing its 1071 rule nationwide. The court previously granted a request by the groups to intervene in the TBA v. CFPB case challenging the 1071 rule—a key procedural development—after they submitted a motion calling on the court to declare that the 1071 final rule is invalid.

ICBA’s CFPB Letter: ICBA previously sent a letter to the CFPB reiterating its call for the agency to stay the effective date of its 1071 rule pending a court challenge to the constitutionality of the bureau’s funding structure. The U.S. 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.

Grassroots Resources: Meanwhile, ICBA continues encouraging community bankers to use its custom resources to speak out on the 1071 rule.

  • ICBA offers custom resources, including social media content and a sample op-ed, to educate and engage customers on the impact of the rule.

  • ICBA’s Be Heard grassroots action center allows community bankers to urge their members of Congress to support a House and Senate resolution to block the rule.

Compliance Resources: ICBA also offers a summary of the rule as well as more than 100 Q&As about it on the ICBA Compliance Vault, while the CFPB offers frequently asked questions and a small entity compliance guide.

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