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LEGAL ISSUES
Federal Judge Delays Section 1071 Compliance Dates - A federal judge in Texas issued an order blocking enforcement of the Consumer Financial Protection Bureau’s (CFPB) Section 1071 final rule while the Supreme Court hears a challenge to the constitutionality of the CFPB’s funding structure. The injunction came at the request of ABA, the Texas Bankers Association and McAllen, Texas-based Rio Bank in litigation brought challenging the Section 1071 rule.
The relief applies while the Supreme Court hears the constitutional challenge to the CFPB in CFPB v. Community Financial Services Association of America, which is scheduled to be argued in October and whose decision could be released any time before the end of June 2024, at which point new compliance deadlines would be issued for ABA and TBA members. “Defendants are ordered to extend Plaintiffs and their members’ deadlines for compliance with the requirements of the Final Rule to compensate for the period stayed,” the judge’s order said. The ruling would thus allow ABA and TBA members to limit Section 1071 implementation costs until the question of the CFPB’s constitutionality is resolved. Additional guidance for ABA members will be forthcoming. MBA has been following this closely, prepared to be a part of an Amicus.
MBA is thrilled to see this action delaying implementation by the courts. We continue to encourage Congress to move House Joint Resolution 66 which would pull the 1071 final rule together.
Read the order.
FREE Webinar on Section 1071 Implementation Delay
Following news earlier this week that a federal judge in Texas issued an order blocking enforcement of the CFPB’s Section 1071 final rule while the Supreme Court hears a challenge to the constitutionality of the bureau’s funding structure, ABA will host a free webinar Friday at 11 a.m. EDT for ABA members and nonmembers to provide an update on what the decision means for banks. Register here.
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