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.”
