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NAFCU, trades call for delay of 1071 rule
NAFCU and other financial trades called on the CFPB to “address the current disparity that exists for financial institutions working to implement” its section 1071 rule. The rule requires credit unions, and other financial institutions, to report data on applicants for small businesses loans.
The trades highlighted the compliance issues for financial institutions regarding the rule, as different institutions now have different dates to come into compliance. The letter comes in response to the bureau’s inaction on delaying the rule for institutions not covered in the recent ruling by a federal court in Texas.
The trades urged the CFPB to establish new effective dates for all institutions “to preserve equity for covered financial institutions.” The trades also pointed out the disparate impact this rule will have on small institutions.
“The decision in Texas Bankers Association has upended the implementation schedule by granting many of the largest institutions an injunction,” the trades noted. “Because those institutions are granted additional time, the market for technological solutions and tools to aid in 1071 Rule compliance has been disrupted.”
NAFCU earlier this month wrote to the CFPB requesting that the bureau to delay the small business lending data reporting rule for credit unions. The rule is set to go into effect Aug. 29, and the Supreme Court is set to hear oral arguments on the bureau’s funding structure Oct. 3.
NAFCU will continue to engage the CFPB to minimize undue regulatory burden and ensure a level playing field.