It seems like every morning you get up, grab some coffee, and look for the latest news on so-called “final” rules. Last week, we found out that the federal bank regulatory agencies announced their intent to rescind the Community Reinvestment Act (CRA) final rule issued in October 2023, and reinstate the previous CRA framework. This week, via a court filing, the Consumer Financial Protection Bureau (CFPB) signaled their intent to “initiate new rulemaking” for Dodd-Frank Act (DFA) 1071.
You may recall that Section 1071 of the Dodd-Frank Act amended the Equal Credit Opportunity Act (ECOA) to require financial institutions to compile, maintain, and submit to the CFPB certain data on applications for credit for women-owned, minority-owned, and small businesses to facilitate enforcement of fair lending laws. For over a decade, the CFPB has held field hearings and symposiums, released reports and data, and finally in 2021 issued a Notice of Proposed Rulemaking on Small Business Data Collection under the ECOA. In 2023, we received a “final” rule, along with a Filing Instruction Guide (FIG) and other materials, tools and information to enable financial institutions to undertake the grueling preparation for complying with the rule. In June 2024, an “interim final rule” provided for an extension of compliance dates.
Litigation ensued from industry groups alleging that the rule was too burdensome. In March 2025, a “stay” was granted by the Fifth Circuit in 1071 litigation brought by the Texas Bankers Association, American Bankers Association and other industry groups. As a result, the 1071 final rule’s compliance deadlines were tolled only for members of the plaintiffs and intervenors in that litigation. Therefore, uncertainty remained for those financial institutions that were not a part of those lawsuits relating to the pending effective dates of the final rule.
Earlier this week, in a case brought by the Revenue Based Finance Coalition challenging the 1071 rulemaking in the U.S. District Court for the Southern District of Florida, the CFPB filed a Response that did not oppose the Plaintiff’s motion to stay the 1071 compliance dates. In the court pleadings, we received new information suggesting that the CFPB intends to initiate new rulemaking. The CFPB states:
“As the Court is aware, new leadership arrived at the CFPB effective January 31, 2025… New leadership has been assessing the Final Rule and the issues that this case presents to determine the CFPB’s position. CFPB’s new leadership has directed staff to initiate a new Section 1071 rulemaking. The CFPB anticipates issuing a Notice of Proposed Rulemaking as expeditiously as reasonably possible. Because the anticipated rulemaking process may moot or otherwise resolve this litigation, holding this matter in abeyance would conserve the Court’s resources.”
With this assertion, it may be time for you to review your financial institution’s current efforts on section 1071 and prepare for a new 1071 rulemaking process. Technically the previously issued final rule, as updated in 2024, remains in place, with a stay in effective dates for certain parties as discussed above. However, it does appear likely that there will be a “do-over” on 1071.