A federal judge in Kentucky has issued a nationwide injunction blocking the enforcement of the Customer Monetary Protection Bureau’s (CFPB) Section 1071 final rule. This injunction will stay in impact till the U.S. Supreme Court guidelines on the constitutionality of the bureau’s funding structure. The Texas judge had previously issued a related order, but it only applied to members of the ABA and Texas Bankers Association.
The Kentucky Bankers Association and eight banks filed a lawsuit against the CFPB in federal court in August. They especially challenged the little organization lending rule and requested that enforcement be halted although the Supreme Court considers the constitutionality of the CFPB’s funding. This separate case, CFPB v. Neighborhood Monetary Solutions Association of America, is scheduled to be argued in October, and its choice could be released just before the finish of June. District Court Judge Karen Caldwell agreed with the plaintiffs and granted the short-term injunction, stating that it would not harm the CFPB or the public. She also described that the plaintiff banks would be burdened with unnecessary charges if the Supreme Court guidelines the bureau’s funding structure unconstitutional.
Though the ABA and TBA requested a nationwide injunction in their lawsuit, the judge decided to limit the order to members of each groups. Afterward, the associations urged the CFPB to voluntarily pause enforcement of the rule although the Supreme Court considers the funding case.