
The Consumer Financial Protection Bureau said it will reissue a Dodd-Frank-mandated
The CFPB said in a Thursday legal filing in Revenue Based Finance Coalition v. CFPB — an industry challenge to the small-business data collection rule required under Section 1071 of Dodd-Frank — that it plans to reevaluate the regulation and initiate a new rulemaking process, which could render the ongoing lawsuit moot.
"CFPB's new leadership has directed staff to initiate a new Section 1071 rulemaking," the filing noted. "The CFPB anticipates issuing a Notice of Proposed Rulemaking as expeditiously as reasonably possible. Because the anticipated rulemaking process may be moot or otherwise resolve this litigation, holding this matter in abeyance would conserve the Court's resources."
The motion signals the agency will not continue to fight to preserve the rule, which was finalized in March 2023 and has been embroiled in litigation brought by bank trade groups and small-business groups.
The CFPB rule went into effect in August 2023 and requires small-business lenders to gather data on the race, ethnicity, gender and sexual orientation of those who apply for small-business loans. The agency under former Director Rohit Chopra argued the measure aimed to track the accessibility of such loans and fight discrimination under federal fair lending laws. Mortgage lenders are already required to track similar kinds of data for home loans under the Home Mortgage Data Act, or HMDA.
The rule has been staunchly opposed by many small-business lenders who want the Trump administration to overturn the rule, even though Congress demanded such data be collected in Dodd-Frank.
In 2024, The House of Representatives
The CFPB's filing on Thursday responds to an unopposed motion from the Revenue Based Finance Coalition to halt enforcement of the agency's Small Business Lending rule. The CFPB, now overseen by acting Director and Office of Management and Budget Director Russell Vought, supports the stay on the rule, citing the new agency leadership's intention to revisit the rule through a new rulemaking process. The CFPB proposed in the filing submitting status reports every 90 days and informing the court of its next steps within 30 days of issuing a revised rule.
The agency argues that pausing enforcement aligns with
Because the rule went into effect in August 2023, it