In two recent litigation status reports, the Consumer Financial Protection Bureau (CFPB or Bureau) indicated that it is working to issue interim final rules for both Section 1071 and Section 1033 in light of an opinion from the U.S. Department of Justice’s Office of Legal Counsel (OLC) concluding that the Bureau cannot lawfully draw funds from the Federal Reserve Board at this time. Specifically, as discussed here, the OLC concluded that the Federal Reserve System presently has no “combined earnings” from which the CFPB may lawfully draw funds under the Dodd‑Frank Act, and the CFPB has publicly stated it anticipates having sufficient funds to continue normal operations through at least December 31, 2025.
Section 1071 is the CFPB’s small business lending data collection and reporting rule, intended to require certain lenders to collect and report data on credit applications from, and loan originations to, small businesses to support fair lending oversight. In a status report to the U.S. Court of Appeals for the Fifth Circuit, the Bureau stated that after extending the 2023 Section 1071 final rule’s compliance dates and issuing a notice of proposed rulemaking on November 13 (discussed here), it is now undertaking efforts to issue an interim final rule for Section 1071.
Section 1033 is the “open banking” rule that would require covered financial institutions to provide consumers and authorized third parties access to consumer financial data through secure interfaces. In a joint status report filed in the U.S. District Court for the Eastern District of Kentucky, the Bureau similarly stated that it will undertake efforts to issue an interim final rule for Section 1033 following the August 22 advance notice of proposed rulemaking and comment period (discussed here).
We will continue to provide updates on any rulemaking developments.