Yesterday, U.S. District Court Judge Randy Crane granted injunctive relief to halt the implementation of the Consumer Financial Protection Bureau’s (CFPB) Section 1071 Final Rule, pending the outcome (expected next year) of a separate case that will answer the question of whether the CFPB’s funding mechanism is unconstitutional.
The ruling will spare banks from having to devote time and resources to compliance with the Section 1071 final rule, with one caveat. As issued, the ruling only appears to apply to banks that are members of the Texas Bankers Association (TBA) and/or the American Bankers Association (ABA).
This, even though TBA/ABA argued in its motion to the court that, “attempting to limit an injunction to Plaintiffs would result in only more confusion.”
“It is extremely unorthodox that a court would narrow the application of its ruling to the members of the plaintiff associations, rather than all parties that are harmed. IBAT has respected TBA/ABA’s leading the charge for relief from 1071 heretofore and was not invited to join the lawsuit as a plaintiff,” said IBAT President and CEO Christopher Williston. “We must now consider all legal options to ensure that no bank is excluded from the ruling or small business subjected to this overly burdensome rule.”
Please stand by for more on this matter as it unfolds.