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#2287632 - 08/14/23 06:44 PM
Re: U.S District Court Grants Injunction on CFPB 1071
Sheldon Hendrix
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Platinum Poster
Joined: Nov 2010
Posts: 987
USA
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I guess in the meantime, we may be able to expect more regulation by blog posts rather than the Federal Register? Yes, which has worked so well in the past.
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#2287803 - 08/17/23 06:31 PM
Re: U.S District Court Grants Injunction on CFPB 1071
Sheldon Hendrix
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Diamond Poster
Joined: Oct 2004
Posts: 2,135
Connecticut
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I spoke with a very high level CFPB person yesterday. He told me that since Dodd Frank passed 1071 there is a very clear legislative mandate to collect the data mandated in 1071. The CFPB was charged with that responsibility. So some way, somehow the mandate will be imposed on financial institutions. Perhaps some of the fields added by the Bureau could be nixed since there was a certain amount of regulatory discretion allowed by the law. But the 1071 mandate will eventually be imposed on lenders no matter the court decision about the CFPB itself.
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#2287886 - 08/21/23 04:32 PM
Re: U.S District Court Grants Injunction on CFPB 1071
Sheldon Hendrix
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Platinum Poster
Joined: Nov 2010
Posts: 987
USA
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Another big unknown is the impact on CRA reform. The banking regulators have publicly stated they will use the 1071 small business definition in CRA reform. Does that mean that reform is on hold until after the final rule? Or will the agencies just write the 1071 definition into a CRA rule without waiting? Or will they implement using the current (or some other rule) and revise once 1071 is settled?
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#2288191 - 08/30/23 05:08 PM
Re: U.S District Court Grants Injunction on CFPB 1071
Sheldon Hendrix
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100 Club
Joined: Jan 2007
Posts: 187
VT
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#2288194 - 08/30/23 05:59 PM
Re: U.S District Court Grants Injunction on CFPB 1071
Sheldon Hendrix
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Power Poster
Joined: Nov 2004
Posts: 3,305
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They have been added to the case. They have asked the court for an injunction that would apply to their members and CFPB has opposed it. The court has yet to rule on that motion, so for now the injunction remains limited to its original group.
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#2288852 - 09/19/23 07:47 PM
Re: U.S District Court Grants Injunction on CFPB 1071
Sheldon Hendrix
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Member
Joined: Sep 2015
Posts: 97
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So, even if the Kentucky order expands the injunction to all FDIC-insured institutions, it doesn't seem to extend the implementation timeline if the Supreme Court rules that CFPB funding is constitutional, correct? If that's the case, then this Kentucky order doesn't really gain us the ability to mitigate our upfront costs, as we're best-served to continue our preparation, right? If the SCOTUS doesn't deliver a decision until June, I wouldn't want to start preparing for an October deadline (IOW, 11.5 months prep is much better than 3-4 months prep time). Thoughts?
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#2288853 - 09/19/23 07:58 PM
Re: U.S District Court Grants Injunction on CFPB 1071
Sheldon Hendrix
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Platinum Poster
Joined: Feb 2013
Posts: 522
Cape Cod
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I totally agree, Rusty. Does anyone really want to "bet the bank" on the outcome?
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#2288858 - 09/19/23 08:26 PM
Re: U.S District Court Grants Injunction on CFPB 1071
Sheldon Hendrix
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Power Poster
Joined: Nov 2004
Posts: 3,305
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Also, it is possible for SCOTUS to hold the funding mechanism unconstitutional but not to invalidate everything that CFPB has done up till now. That would leave the rule (and its deadlines) intact.
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#2288917 - 09/20/23 09:03 PM
Re: U.S District Court Grants Injunction on CFPB 1071
RustyShackleford
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Junior Member
Joined: Jun 2023
Posts: 37
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I'm no legal scholar, but since 1071 is part of the Dodd-Frank Act it's my understand the reporting requirement for the data points required by the Act will need to be collected regardless of the outcome of this case. The main question at issue is the other data points the CFPB added that weren't in the original legislation.
Please correct me if I'm wrong.
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#2288919 - 09/20/23 09:22 PM
Re: U.S District Court Grants Injunction on CFPB 1071
Sheldon Hendrix
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Member
Joined: Sep 2015
Posts: 97
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So, let's say the CFPB's funding is found unconstitutional, and by law, we have to report the original 13 data points. Who sets up the reporting system and enforces the law? Would it fall to the other regulators to each solve in their own way, considering the CFPB won't be able to do anything until they secure constitutionally-sound funding? Or would it fall on the FFIEC, similar to HMDA?
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#2288923 - 09/20/23 09:46 PM
Re: U.S District Court Grants Injunction on CFPB 1071
Sheldon Hendrix
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Platinum Poster
Joined: Nov 2010
Posts: 987
USA
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And if the CFPB's funding is unconstitutional because they're not budgeted by Congress, what does that say about the FRB, the FDIC, and the OCC, which are not budget items?
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#2288924 - 09/20/23 11:00 PM
Re: U.S District Court Grants Injunction on CFPB 1071
Sheldon Hendrix
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Power Poster
Joined: Nov 2004
Posts: 3,305
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Those are all different from the CFPB. FRB is funded by income from operations (interest on securities and fees). OCC and FDIC are funded by fees on regulated organizations.
CFPB sets its own budget then tells FRB to fund that budget.
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#2288957 - 09/21/23 05:27 PM
Re: U.S District Court Grants Injunction on CFPB 1071
Sheldon Hendrix
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Platinum Poster
Joined: Nov 2010
Posts: 987
USA
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None of them are funded by Congress, however.
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#2288959 - 09/21/23 06:43 PM
Re: U.S District Court Grants Injunction on CFPB 1071
Sheldon Hendrix
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Power Poster
Joined: Nov 2004
Posts: 3,305
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No, but that's not really the issue - it's the expenditure of federal government funds without Congressional appropriation. The Fed's profits (what it doesn't need to fund operations) are distributed to the Treasury and become general government funds. So in essence, the argument is that the CFPB is spending government funds without any Congressional appropriation.
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#2289041 - 09/25/23 05:47 PM
Re: U.S District Court Grants Injunction on CFPB 1071
InFairness, CRCM
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Diamond Poster
Joined: Jun 2006
Posts: 1,194
South
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None of them are funded by Congress, however. Seems like a systemic problem.
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