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CUNA, Cornerstone League, and Rally Credit Union filed to join an Emergency Motion for Preliminary Injunction in the U.S. District Court for the Southern District of Texas to include credit unions in court action already in effect that stops implementation of the Consumer Financial Protection Bureau's (CFPB) section 1071 rule.
The court previously issued a preliminary injunction for the rule, but it applies only to American Bankers Association and Texas Bankers Association members and Rio Bank. The court granted the credit union motion to intervene Monday.
“CUNA, Cornerstone, and Rally seek expansion of the injunction to apply to credit unions, and all financial institutions covered by the rule. There are questions about this rule’s impact on the ability of credit union to serve small businesses, not to mention the current questions about the bureau’s constitutionality,” said CUNA President/CEO Jim Nussle. “Credit unions nationwide deserve the same relief granted to banks, especially since the CFPB itself noted in the final rule that smaller financial institutions will face difficulties complying with the rule in a timely manner.”
CUNA, Cornerstone, and Rally each detailed the substantial cost and impact of the 1071 rule in support of the filing.
The 1071 rule—finalized in March—requires credit unions to collect and report certain data on applications for credit for women-owned, minority-owned, and small businesses. CUNA maintains the overly broad scope of the rule will raise the cost of small business borrowing and require burdensome data collection.