Judge Randy Crane (E.D. Tex) ruled on August 26, 2024 that the CFPB did not exceed its authority under Dodd Frank when it issued its final Section 1071 small business lending rule. The court also rejected other Administrative Procedure Act (APA) challenges to the rule. However, the court did not issue a final judgment as, at that time, the court still had to rule on the two motions filed by certain plaintiff-intervenors: first, to amend their complaint to add a claim based on the illegality of the CFPB being funded by the Federal Reserve Board, when since September, 2022, “the combined earnings of the Federal Reserve System” has been negative and second, for judgment on the pleadings.
After the parties briefed those two motions, the plaintiff-intervenors withdrew their two motions without prejudice. The trade groups then requested Judge Crane to enter a final judgment against them which the CFPB did not oppose. Yesterday, Judge Crane entered a final judgment, which now clears the way for the plaintiffs to appeal that judgment to the Fifth Circuit Court of Appeals. We would expect a notice of appeal to be filed very soon, after which the record will be transferred to the Fifth Circuit and a briefing schedule will be established. Stay tuned!