As you’ve likely heard, on July 31, 2023, the U.S. District Court for the Southern District of Texas issued an order to delay the CFPB from implementing and enforcing the small business lending rule (Section 1071) for the plaintiffs (including any allowed interveners) and their members. While the Supreme Court will now have the final say, that likely won’t happen until late 2023 to mid-2024. If you are in the plaintiff group, you might be doing a little happy dance, but what if you’re not?
The CFPB can’t just come out and delay Section 1071 for all financial institution’s subject to the Rule or do away with it. It’s a law, and any changes must go through Congress and the typical proposal/final rule process. If you remember, the CFPB also sued in the state of California for not getting this rule into effect soon enough, so we just don’t believe it’s going away…ever. Needless to say, it’s complicated! Our best advice at this point, if you are not in the plaintiff class (and maybe even if you are), just stay the course. Keep working towards implementation so that when those mandatory compliance dates are set in stone, you are ready and not scrambling at the last minute.
Jerod explains more in the video.
Published
2023/08/28
