The Consumer Financial Protection Bureau on Tuesday asked a Kentucky federal judge to stay an industry lawsuit challenging the agency’s small-business lender reporting requirements, saying a largely identical challenge filed earlier in Texas should take precedence.
In a motion to U.S. District Judge Karen K. Caldwell, the CFPB argued the lawsuit brought by the Kentucky Bankers Association and eight Kentucky-based banks should wait for the “first-filed” litigation that the Texas Bankers Association and the American Bankers Association are leading in Texas federal court.
Both cases seek to overturn the CFPB’s so-called Section 1071 rule, which established new requirements for banks and other lenders to report comprehensive data to the agency on their small-business lending activity. The rule was supposed to begin phasing in this year but has been delayed amid the litigation.
Although the two lawsuits involve different sets of named plaintiffs, the CFPB said they involve “almost exactly the same claims, against the same rule.” Many of the Kentucky bank plaintiffs are also members of one of the industry groups — the Independent Community Bankers of America — that have joined in on the Texas case as intervenors, according to the agency.
