On March 13, a trade group in commercial finance filed an unopposed motion in the U.S. District Court for the Southern District of Florida to stay the CFPB’s Section 1071 rule. The final rule would amend the ECOA to mandate that certain financial institutions collect and report data on small business lending, including applications from women- and minority-owned businesses (covered by InfoBytes here). The motion came on the heels of a December 2023 lawsuit filed where the trade group challenged the CFPB’s characterization of sales-based financing as a form of credit under the ECOA and therefore subject to Section 1071’s collection and reporting requirements. According to the motion, the CFPB’s actions in recent weeks “raise significant uncertainty regarding the Bureau’s position on the Section 1071 Rule” such that the court should stay the rule and toll its July 18 compliance deadline with respect to the trade group and its members. The motion also followed a Florida federal magistrate judge’s February 17 recommendation that the court deny the trade group’s motion for summary judgment, stating that the CFPB did not exceed its authority by adopting the 1071 Rule.

Visit our resource center, CFPB Pause: Where From Here?, to stay on top of the latest and what it may mean for the federal and state regulatory and enforcement landscape.