In an important recent development, a federal court has issued an order imposing an injunction that postpones the compliance dates for the Consumer Financial Protection Bureau’s (CFPB) final rule. This rule governs the collection of small business lending data under Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). This decision was reached on July 31, and will result in a hold off on all deadlines for adherence to the final rule for as long as the Supreme Court hears a separate, yet connected case. This case is contesting the constitutionality of the CFPB’s funding structure. This development was reported by Nutter McClennen & Fish LLP.
The put on hold status for the enforcement of the requirements outlined in the final rule is noteworthy as it could potentially result in significant revisions, or even the entire overturning of the rule itself, depending on the outcomes of the case under review by the Supreme Court. This became a central issue in light of existing debates about the operational structure of the CFPB.
The manner in which the CFPB’s funding structure is historically constituted has sparked a series of debates on its constitutional validity. The final rule pertaining to Section 1071 of the Dodd-Frank Act, which necessitates extensive reporting concerning small business lending, in particular, has been singled out for scrutiny. Hence, this particular case in the Supreme Court will certainly be of interest to legal professionals in large corporations, particularly those associated with banking and finance sectors, as well as large law firms specializing in corporate and financial law.
In conclusion, as legal professionals keep their eager watch on the evolving landscape, they need to note that the direction of the Supreme Court’s ruling could significantly alter the enforcement of the CFPB’s regulations, particularly in relation to small business lending.