Texas Court Expands 1071 Injunction to Cover All Banks
Posted: Nov 01 2023
A Texas court has expanded a preliminary injunction on enforcement of the CFPB’s Section 1071 small business data collection rule to include all financial institutions covered by the rule. The U.S. District Court for the Southern District of Texas in July granted the injunction to ABA and Texas Bankers Association members in a lawsuit over the rule brought by the associations and the McAllen, Texas-based Rio Bank. ABA and TBA asked at the time for the injunction to apply to all FDIC-insured institutions, but the judge sided with a CPFB request to limit the order to association members.
The relief applies while the U.S. Supreme Court hears a constitutional challenge to the CFPB’s funding structure in a separate case, CFPB v. Community Financial Services Association of America, with a decision possibly coming before the end of June 2024. ABA and TBA in August asked CFPB Director Rohit Chopra to voluntarily delay implementation of Section 1071 for all banks not covered by the original injunction.