A federal judge in Texas on Friday issued a preliminary injunction against enforcing new rules implementing the Community Reinvestment Act in a lawsuit brought by the American Bankers Association and other business groups.
ABA, the U.S. Chamber of Commerce and five national and state associations sued banking agencies in February for exceeding their statutory authority with their recent amendments to final rules implementing the CRA. In a lawsuit filed in the Northern District of Texas, the groups asked the court to vacate the rules. They also sought a preliminary injunction preventing the agencies from enforcing the rules while the court decides the merits of the case.
District Court Judge Matthew Kacsmaryk granted the plaintiffs their request to pause implementation of the rules while the case moves forward. Among other things, Kacsmaryk said the plaintiffs had shown that banks would incur substantial and unrecoverable costs if the rules were to be enforced only to be struck down at a later date.
The other plaintiffs in the lawsuit are the Texas Bankers Association, Independent Community Bankers of America, Independent Bankers Association of Texas, Amarillo Chamber of Commerce and Longview Chamber of Commerce. In a joint statement, the plaintiffs said they welcomed the decision.
“While we strongly support the goals of CRA, the final rules exceeded the banking agencies’ regulatory authority and created disincentives for banks to lend in low- and moderate-income communities that need access to credit the most,” the groups said. “We look forward to litigating this matter to a final judgment.”
