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The decision cleared away a major cloud that had slowed the CFPB's momentum on rulemaking and enforcement. In both the Texas and Kentucky lawsuits, for example, the agency had been ordered to halt implementation of its Section 1071 rule while the funding issue was before the high court.

The CFPB has since pushed back the rule's compliance deadlines by nearly 10 months — until July 2025 at the earliest — to make up for the delay.

In the meantime, the CFPB has also begun moving to resume a number of other enforcement-related lawsuits that had been held up by the funding issue. With the agency's active caseload set to swell, CFPB officials have said they are staffing up with additional personnel to help handle the work.

Tuesday's motion did not argue that the CFPB needs a stay to avoid being stretched too thin. But the CFPB did say it would be more efficient for everyone if the more advanced Texas case was allowed to play out first and then the Kentucky case could follow "with the benefit of the Texas judgment."

That's because the outcome of the former could have potentially "dispositive" effects on the latter, narrowing what would need to be resolved, according to the agency.

"It makes little sense for the parties and the court to devote significant time and resources at this point to attempting to sort out what these effects may be and exactly which banks may be affected," the CFPB said. "The better course is to simply await the outcome in that case."

The CFPB also said the Kentucky plaintiffs are on board with staying most of their lawsuit's claims. Although they want to continue pressing a First Amendment claim related to whether the agency can penalize lenders for discouraging small-business loan applicants from volunteering data for reporting purposes, the CFPB said this claim can and should wait.

"It would make little sense to reach out to decide this constitutional claim first, before resolving plaintiffs' antecedent claims that the rule is invalid and unenforceable in full," the CFPB said. "That approach would turn basic principles of constitutional avoidance on their head."

The rule at the heart of the Kentucky and Texas lawsuits was finalized to implement Section 1071 of the Dodd-Frank Act, which instructed the CFPB to begin collecting small-business loan applicant data for uses including fair lending oversight.

Under the rule, the CFPB would begin collecting that information from banks, fintech firms and other small-business lenders, including details about their applicant demographics, pricing and approval decisions.