The Consumer Financial Protection Bureau should extend a court-ordered stay of its Section 1071 final rule to cover all FDIC-insured banks while the U.S. Supreme Court considers a separate legal challenge concerning the bureau, 50 state bankers associations said today in a letter to CFPB Director Rohit Chopra. A federal judge in Texas last week issued a preliminary injunction of the rule until the Supreme Court decides on a case involving the constitutionality of the bureau’s funding structure in CFPB v. Community Financial Services Association of America.
The 1071 case was brought by the Texas Bankers Association, Rio Bank and the American Bankers Association, which asked for a national injunction covering all lenders. However, the judge sided with the CFPB’s request to have the order apply only to the associations’ members. ABA and TBA have since asked Chopra to delay 1071 compliance for all banks, and in their letter, the state associations repeated that request.
“As the TBA and the ABA asserted in their letter, a stay from the bureau would streamline administration for the agency after the Supreme Court’s ruling in the Community Financial case by including all banks and not just those that are members of TBA or ABA,” the associations said. “We agree that extending the relief already provided to numerous banks nationwide would be prudent and ameliorate confusion.”