ABA Banking Journal
No Result
View All Result
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive
SUBSCRIBE
ABA Banking Journal
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive
No Result
View All Result
No Result
View All Result
ADVERTISEMENT
Home Uncategorized

Texas federal court grants injunction halting CFPB Section 1071 final rule for ABA, TBA members

August 1, 2023
Reading Time: 2 mins read
Texas federal court grants injunction halting CFPB Section 1071 final rule for ABA, TBA members

1071 Litigation
Texas Bankers Association v. Consumer Financial Protection Bureau
Date: June 23, 2023

Issue: Whether the Consumer Financial Protection Bureau’s (CFPB) final rule implementing section 1071 of the Dodd-Frank Act is unconstitutional under the Appropriations Clause and violates the Administrative Procedure Act (APA).

Case Summary: A Texas federal district court partially granted a preliminary injunction brought by the American Bankers Association, Texas Bankers Association and Rio Bank (plaintiffs) to block implementation of CFPB’s 1071 Final Rule

In May, ABA joined the Texas Bankers Association and Rio Bank lawsuit to block CFPB from implementing the 1071 Final Rule. The 1071 Final Rule requires a covered financial institution to collect and annually report to CFPB data on covered applications from small businesses. In its amended complaint, Plaintiffs alleged the 1071 Final Rule should be vacated under the Fifth Circuit’s decision in Community Financial Services Association (CFSA) v. CFPB, which ruled CFPB’s funding structure is unconstitutional. Plaintiffs also alleged the 1071 Final Rule violates the APA because it is arbitrary and capricious, and CFPB its abused discretion by promulgating a final rule beyond the statutory scope.

Afterward, plaintiffs moved the court for a preliminary injunction. First, plaintiffs argued they are likely to succeed on the merits of their constitutional claim. Second, plaintiffs argued irreparable harm would occur without a stay. Finally, plaintiffs argued granting an injunction serves the public interest, as the interests of judicial efficiency weigh heavily in favor of a stay given the pending resolution of CFPB’s funding question.

The court partially granted plaintiffs’ motion for a preliminary injunction. To begin, the court concluded plaintiffs had standing for requesting a preliminary injunction. The court reasoned plaintiffs’ estimated compliance costs for the final rule were sufficiently concrete and particularized to confer standing. In addition, the court concluded these unrecoverable compliance costs will cause irreparable harm to plaintiffs’ members. Finally, considering equities and public interest, the court determined it could not conclude a stay would harm more than benefit the public interest. Therefore, the court agreed with the plaintiffs and found that a preliminary injunction was appropriate.

However, the court considered the scope of the preliminary injunction and determined it would only apply to plaintiffs’ members. Plaintiffs asserted the injunction should be nationwide because “limiting the relief to certain jurisdictions or parties would create patchwork ruling which would undermine the injunction and create unequal enforcement of an agency rule that is invalid.” According to the court circumstances warranting nationwide relief include a “constitutional uniformity principle” and “concern that patchwork rulings would undermine an injunction limited to certain jurisdictions.” However, the court emphasized generic reasons such as “nationwide scope” or “need for uniformity without more are insufficient.

Bottom Line: The preliminary injunction applies while the U.S. Supreme Court hears the constitutional challenge in CFPB v. CFSA, which is scheduled to be argued in October and whose decision could be released any time before the end of June 2024. At that point, new compliance deadlines would be issued for ABA and TBA members.

Documents: Order

ADVERTISEMENT
Tags: Banking Docket
ShareTweetPin

Related Posts

Recent news from Treasury’s Office of Foreign Assets Control: April 5

Recent news from Treasury’s Office of Foreign Assets Control: June 9

Uncategorized
June 9, 2025

News items that are the most recent sanctions-related actions from the Office of Foreign Assets Control.

Preliminary injunction denied in bid to delay Capital One’s Discover purchase

Preliminary injunction denied in bid to delay Capital One’s Discover purchase

Uncategorized
June 2, 2025

A California federal court denied a group of consumers’ motion for a preliminary injunction seeking to delay Capital One’s impending purchase of Discover.

Third Circuit reverses FCRA lawsuit against Nissan over lease dispute

Third Circuit reverses FCRA lawsuit against Nissan over lease dispute

Uncategorized
June 2, 2025

A unanimous Third Circuit panel reversed a New Jersey federal court decision and ruled that a jury could find Nissan’s credit reporting inaccurate and its investigation unreasonable under the FCRA.

Green Dot agrees to pay Federal Reserve $44 Million to resolve UDAP allegations.

ABA, co-plaintiffs file joint motion with Federal Reserve to stay proceedings in stress test lawsuit

Uncategorized
June 2, 2025

ABA and its co-plaintiffs filed a joint motion with the Fed to stay proceedings in their lawsuit claiming the Fed’s stress testing framework violates the APA.

U.S. Supreme Court vacates Ninth Circuit preemption decision

U.S. Supreme Court clarifies wire fraud liability

Uncategorized
June 2, 2025

In a unanimous decision, the U.S. Supreme Court ruled a defendant may be convicted of federal fraud for inducing a victim to enter into a transaction under materially false pretenses, even if the defendant did not intend to...

Eleventh Circuit revives cash advance fraud lawsuit against Citigroup

Eleventh Circuit revives cash advance fraud lawsuit against Citigroup

Uncategorized
June 2, 2025

In a unanimous decision, an Eleventh Circuit panel reversed and remanded a district court’s dismissal of a lawsuit alleging Citigroup operated a cash advance fraud scheme.

NEWSBYTES

ABA DataBank: May inflation cooler than expected, but still above Fed’s 2% target

June 13, 2025

Consumer sentiment rebounds in June

June 13, 2025

Survey: Banks boosting cybersecurity due to AI while also investing in technology

June 13, 2025

SPONSORED CONTENT

AI Compliance and Regulation: What Financial Institutions Need to Know

Unlocking Deposit Growth: How Financial Institutions Can Activate Data for Precision Cross-Sell

June 1, 2025
Choosing the Right Account Opening Platform: 10 Key Considerations for Long-Term Success

Choosing the Right Account Opening Platform: 10 Key Considerations for Long-Term Success

April 25, 2025
Outsourcing: Getting to Go/No-Go

Outsourcing: Getting to Go/No-Go

April 5, 2025
Six Payments Trends Driving the Future of Transactions

Six Payments Trends Driving the Future of Transactions

March 15, 2025

PODCASTS

Podcast: Old National’s Jim Ryan on the things that really matter

June 12, 2025

Podcast: What bankers need to know about ‘First Amendment audits’

June 5, 2025

Podcast: Accelerating banking for quick-service restaurants

May 8, 2025
ADVERTISEMENT

American Bankers Association
1333 New Hampshire Ave NW
Washington, DC 20036
1-800-BANKERS (800-226-5377)
www.aba.com
About ABA
Privacy Policy
Contact ABA

ABA Banking Journal
About ABA Banking Journal
Media Kit
Advertising
Subscribe

© 2025 American Bankers Association. All rights reserved.

No Result
View All Result
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive

© 2025 American Bankers Association. All rights reserved.