Credit union Movement gets involved in CFPB lawsuit
Published by: Sean Brown
August 22, 2023 | Regulatory
As credit unions continue to innovate and find new ways to serve members, the greater credit union system is working to protect your ability to operate without unnecessary regulatory burdens. Shortly after the Consumer Financial Protection Bureau (CFPB) finalized a proposed rule amending Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Texas Bankers Association, the American Bankers Association, and Rio Bank of McAllen, Texas, challenged the rule’s validity and enforcement due to constitutional defects in the CFPB’s funding scheme.
On July 31, 2023, the Federal District Court granted a motion for preliminary injunction against CFPB implementation of the proposed 1071 Rule for only the Plaintiffs and their member banks. Subsequently, CUNA, the Cornerstone League, and Rally Credit Union of Corpus Christi, Texas, filed a Motion to Intervene contending the narrow scope of the preliminary injunction gave banks a competitive advantage and renders many parts of the proposed 1071 rule unworkable if it is only applied to certain segments of the financial services marketplace.
On August 14, CUNA et al.’s Motion to Intervene was granted by the Court, allowing them to pursue a motion for preliminary injunction, which likely will afford credit unions the same protections as banks in this case. The League will continue to monitor this case as it moves through the judicial process.
Contact Sean Brown for questions or assistance.