On September 14, a significant legal development unfolded in the United States. The U.S. District Court for the Eastern District of Kentucky granted a motion by the Kentucky Bankers Association (KBA) and eight Kentucky-based banks, seeking a preliminary injunction regarding a certain small business lending rule. This decision enjoins the Consumer Financial Protection Bureau (CFPB) from enforcing the ‘Small Business Lending Rule’ against the plaintiffs and their members.
The ‘Small Business Lending Rule’, introduced by the CFPB, had been a matter of intense debate within the banking and legal community. The Kentucky Bankers Association and the eight banks had been vociferously challenging the rule, which led to them seeking a preliminary injunction.
The court, in response to the motion, granted the injunction to halt the rule until the Supreme Court provides a ruling regarding the CFPB’s funding structure in its current examination of the Consumer Financial Protection Bureau.
The verdict was positively received by the plaintiffs, reckoning it as a fair judicial intervention to prevent enforcement of a rule they have been challenging.
For further details, please see the report by Sheppard Mullin Richter & Hampton LLP, who provide a comprehensive breakdown of the proceedings and implications of this legal event.