Bloomberg Law: CFPB Small Business Loan Rule Partially Blocked

Bloomberg Law, July 31, 2023, CFPB Small Business Loan Rule Partially Blocked

Fair lending advocates blasted Crane’s reasoning and the banks’ challenge to the rule.

“It’s a ludicrous and retrograde position to take, in effect asserting a right to discriminate in secret to illegally deprive marginalized communities of economic opportunity,” Jesse Van Tol, the president and CEO of the National Community Reinvestment Coalition, said in a statement to Bloomberg Law.

But rather than imposing a nationwide preliminary injunction in the case, as the plaintiffs requested, Crane elected only to stop the CFPB from requiring members of the two trade groups to start preparing for small business data collection before the Supreme Court issues its decision on CFPB funding.

Imposing a nationwide injunction would only lead to “more confusion,” Crane wrote.

The ruling may increase confusion among lenders, however, by limiting its applicability to members of the two trade groups.

“This tedious whining only leaves the industry trapped in uncertainty,” Van Tol said of the banks’ complaints.

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