In case you missed it, last week the community banking industry celebrated a major victory as the injunction halting implementation of small business data collection requirements (under Section 1071 of the Dodd-Frank Act) was expanded to all financial institutions nationwide.
The expanded injunction came as a result of legal action taken by IBAT, ICBA and Texas First Bank identified in the case as “the community bank intervenors.” The action provided a level playing field to ensure that all banks, not just members of the American Bankers Association (ABA) and the Texas Bankers Association (TBA), were exempt from implementing the rules until the fate of the Consumer Financial Protection Bureau (CFPB) is decided by the Supreme Court next June.
If the Supreme Court upholds the funding mechanism of the CFPB, the bureau will then have to issue a new timeline for implementation of the final rules under 1071. If the court rules against the bureau, then it will have to decide what happens to the many rules it has promulgated since it was founded in 2011.
