As part of ICBA’s efforts to ensure a recent court decision granting temporary injunctive relief from the Consumer Financial Protection Bureau’s Section 1071 final rule applies to all community banks, ICBA on Friday filed a motion and complaint calling on the court to invalidate the final rule and enjoin the CFPB from enforcing it.
Court Filings: In a motion to intervene and in a separate complaint, ICBA, the Independent Bankers Association of Texas (IBAT), and Texas First Bank called on the U.S. District Court for the Southern District of Texas to permit ICBA, IBAT, and Texas First to join the TBA v. CFPB case, declare that the 1071 final rule is invalid and unenforceable, and provide injunctive relief. The filings explained that the limited injunctive relief that the CFPB requested and the court granted to the parties in TBA v. CFPB does not extend to all community banks.
Letter to the CFPB: Additionally, ICBA sent a letter to the CFPB reiterating its call for the agency to stay the effective date of its 1071 rule pending a court challenge to the constitutionality of the bureau’s funding structure. The U.S. Supreme Court this year agreed to review the U.S. Court of Appeals for the Fifth Circuit’s October 2022 decision that the CFPB’s funding structure violates the Constitution’s appropriations clause and separation of powers. ICBA reiterated its March letter that told the CFPB that granting a stay will provide certainty to community banks and small businesses while the courts decide on the constitutionality of the bureau’s funding model.
Bottom Line: In a message to community bankers on Friday, ICBA President and CEO Rebeca Romero Rainey said the actions reiterate what ICBA has long said—the implementation of the 1071 rule should be suspended until the courts decide on the constitutionality of the agency’s funding structure. “By arguing that the district court’s preliminary injunction should apply only to the plaintiffs in the case before that court, the CFPB has created an uneven regulatory playing field,” she said.
Grassroots Campaign: While ICBA continues taking its case to the courts and the CFPB, it also continues calling on community bankers to keep the pressure on Congress. Community bankers can use ICBA’s Be Heard grassroots action center to urge their lawmakers to support a resolution to block the 1071 rule, which the House Financial Services Committee advanced last week.
Custom Resources: ICBA also recently released customizable resources that community bankers can use to educate and engage their customers on the 1071 rule, including social media content, a sample letter to Congress, and a sample op-ed.
Compliance Resources: Finally, ICBA offers a summary of the rule as well as more than 100 Q&As about it on the ICBA Compliance Vault, while the CFPB offers frequently asked questions and a small entity compliance guide for more information.
