More than symbolic
On 1071 Final Rule, we sued because there was no time to wait.”
When Gov. Greg Abbott joined us to cut the ribbon on the new TBA headquarters in Austin, he said members of the Texas Bankers Association are “co-authors in the Texas economic juggernaut” and are vital parts of the “financial backbone” of our communities. Completion of the headquarters project is a major accomplishment and the Governor’s comments underscore your critical role in building Texas into the world’s ninth largest economy. Most importantly, your work has made a difference for families, businesses of every size and hometowns across the Lone Star State.
The new TBA Headquarters stands as a symbol of the strength that Texas banks provide for our state and our nation. But TBA’s work on your behalf must be more than symbolic.
That is why TBA took the national lead in April to the fight against the Consumer Financial Protection Bureau’s unconstitutional over-reach on its Section 1071 small business data collection final rule. Alongside Immediate Past Chairman Ford Sasser’s community bank, Rio Bank of McAllen, TBA filed suit against the Bureau for taking three pages of legislation and turning it into a final rule of nearly 900 pages of regulation. In the Dodd-Frank bill, Congress called for 13 data points in Section 1071. More than a decade later, CFPB took the liberty to increase the number of data points and fields to 81 — a 600% increase. We have argued that CFPB has acted unconstitutionally and has defied current law under the Administrative Procedures Act. But CFPB’s Section 1071 Final Rule also defied common sense.
Does such a bureaucratic rule make it easier or more complicated for small businesses to apply for a loan? Does piling on another layer of Washington reporting and adding scores of bureaucratic boxes to check make it easier or harder for community banks to lend to small businesses? We know the answer. Washington bureaucrats, however, often listen only to those inside the Beltway and fail to understand the immediate and irreparable harm of their actions in the heartland.
On 1071 Final Rule, we sued because there was no time to wait. You know the negative impact of such a behemoth on the ability of small and mid-size banks to serve minority and women owned small businesses. And any preparations and resources you commit toward implementation represent unrecoverable costs — especially for community banks.
We were pleased that American Bankers Association President & CEO Rob Nichols agreed. At our Annual Convention he announced that ABA had joined TBA and Rio Bank as co-plaintiffs.
We did not want to sue CFPB again. But there was no other recourse to challenge an agency that is unaccountable and believes that only it knows best.
Under new TBA Chairman David Osborn, pushing back against CFPB’s unconstitutional actions will not be our only priority. But TBA will continue to take a stand on behalf of our members, their customers and communities.