Senators call on CFPB to stay 1071 rule effective date for all CUs

Eight Senators wrote to Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra to request it stay the effective date of its 1071 rule for all credit unions and FDIC-insured banks. The rule would require credit unions to collect and report certain data on applications for credit, and CUNA has concerns about its impact on community-based financial institutions.

The U.S. District Court for the Southern District of Texas issued a preliminary injunction for the rule, but it only applies to American Bankers Association members. CUNA, the Cornerstone League, and Rally Credit Union have filed to join an emergency motion for preliminary injunction to include all credit unions.

The Senators note “deep concerns about the potential adverse impacts” of the rule, and also note the current legal challenge facing the CFPB at the U.S. Supreme Court.

“At your agency’s request, a recent ruling of the U.S. District Court has created a situation where only some lenders, including large systematically important lenders, will receive a temporary reprieve from working toward implementation of the CFPB’s Section 1071 small business data collection rule, while others including many community banks and all credit unions, must seek further relief from the judicial system,” the Senators wrote.

CUNA and Leagues support a joint resolution from Sen. John Kennedy, R-La., to nullify the 1071 rule via Congressional Review Act.

Kennedy and Sens. Cynthia Lummis, R-Wyo., Thom Tillis, R-N.C., Steve Daines, R-Mont., Bill Hagerty, R-Tenn., J.D. Vance, R-Ohio, Mike Crapo, R-Idaho, and Kevin Cramer, R-N.D., sent the letter.