Texas Bankers Association Sues to Block Section 1071 Rule
On April 26, the Texas Bankers Association and Rio Bank, McAllen, Texas filed a complaint in the U.S. District Court for the Southern District of Texas challenging the Consumer Financial Protection Bureau’s (CFPB or Bureau) final rule under § 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Final Rule).
According to the complaint, the Final Rule “requires banks to develop and implement new software and compliance mechanisms to comply with over 80 reporting requirements that have been exponentially grown by the CFPB since the [Dodd-Frank] Act requiring this Rule was passed. Unable to effectively comply with these burdensome and overreaching new reporting requirements, the Final Rule will drive smaller providers from the market, causing a decrease in the products available to all customers including minority and women-owned small businesses. While the CFPB was alerted to this concern during the pendency of the Rule, it chose to ignore such concerns and paper over the lending community’s legitimate apprehensions with the Rule as it was formulated.”
The “CFPB has taken three pages of legislation requiring 13 data points and turned it into nearly 900 pages of regulation requiring 81 data points. CFPB repeatedly exceeds its authorities and ignores required rulemaking law because its unconstitutional funding and leadership structure make it accountable to no one,” said TBA President and CEO Chris Furlow. “It is unfortunate that the courts are currently the only recourse to challenge a virtually untouchable agency that believes it can hold everyone to account but itself.”
Read more HERE.
