The Credit Union National Association (CUNA), along with Cornerstone League and Rally Credit Union, filed to join an injunction that seeks to stop implementation of the Consumer Financial Protection Bureau’s (CFPB) section 1071 rule.
Specifically, these organizations are lobbying to join the Emergency Motion for Preliminary Injunction in the U.S. District Court for the Southern District of Texas. It currently only includes the American Bankers Association, Texas Bankers Association members, and Rio Bank. They would like it to also include credit unions.
The 1071 rule, which was 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, 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,” CUNA President and CEO Jim Nussle said. “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.”
In the filing, CUNA, Cornerstone, and Rally each detailed the substantial cost and impact of the 1071 rule on credit unions. CUNA maintains that the overly broad scope of the rule will raise the cost of small business borrowing and require burdensome data collection.