In the wake of a judge’s order delaying compliance dates with the CFPB’s Section 1071 final rule for Texas Bankers Association and ABA members, TBA and ABA yesterday asked CFPB Director Rohit Chopra to use his discretion to apply the stay to all FDIC-insured banks.
“As you know, we requested relief for every entity subject to the final tule, but the court limited that relief to members of our associations (including co-plaintiff Rio Bank),” TBA and ABA wrote. “While most FDIC-insured banks fall within our membership, there are some that do not. We recognize the bureau’s desire to continue pressing forward with certain covered institutions and so are only asking for your consideration of extending the stay to the banking industry. We believe this would simplify things for both your agency and the regulated community.”
The judge’s preliminary injunction came in a case brought by TBA, Rio Bank and ABA challenging the Section 1071 rule on administrative and constitutional grounds. The injunction stays the final rule while a constitutional challenge to the CFPB is pending in the Supreme Court, allowing banks to avoid expensive compliance preparation with the bureau’s constitutionality under question. A decision in the separate case is expected in the first half of 2024.
“With oral argument in Community Financial in 60 days and a decision likely within six to eight months, we believe the CFPB extending the relief already provided to numerous banks nationwide would be prudent and ameliorate confusion,” TBA and ABA added in their letter to Chopra. “This could take whatever form the Bureau deems appropriate (i.e., amending compliance dates or providing other guidance).” Register for a free ABA expert webinar on the 1071 injunction.
