The impact of a federal court order freezing implementation of the small business lending rule issued by the federal consumer financial protection agency spawned a new set of “frequently asked questions” (FAQs) by the agency Thursday.
The FAQs address an order issued July 31 by the U.S. District Court for the Southern District of Texas to the Consumer Financial Protection Bureau (CFPB). The court ordered the bureau not to implement or enforce the agency’s small business lending rule issued in March against plaintiffs in the case Texas Bankers Association, et al. v. CFPB, et al., and the association’s members. Also a plaintiff in the case is the American Bankers Association (ABA).
The order stays all deadlines for compliance with the small business lending rule for plaintiffs in that case and their members, according to the CFPB.
The final rule, unveiled March 30 (meeting a court order to finalize the rule by March 31), requires lenders to collect and report information about the small business credit applications they receive, including geographic and demographic data, lending decisions, and the price of credit. Under the rule, lenders that originate at least 500 loans annually must collect data starting April 1, 2025. Those that originate at least 100 loans annually must collect data starting Jan. 1, 2026. Those provisions are stayed, at least for now, for plaintiffs in the case and their members.
The FAQs issued Thursday address institutional coverage of the rule, covered credit transactions, small businesses, firewall, and record retention.