Fifth Circuit orders CFPB to respond on TBA lawsuit

In February, a “pause in proceedings” was requested, and on Friday, the Fifth Circuit Court of Appeals in New Orleans ordered the Consumer Financial Protection Bureau (CFPB) to inform the Court of its plans regarding the Section 1071 lawsuit led by the TBA. The order issued by the Fifth Circuit Court states:

“A new President was inaugurated January 20, 2025. This case had already been set to be orally argued on February 3, 2025. The morning of oral argument, CFPB notified the court that “[c]ounsel for the CFPB has been instructed” by new leadership “not to make any appearances in litigation except to seek a pause in proceedings.”

Accordingly, although both sides appeared in court as scheduled, only Texas Bankers addressed the merits. The court then granted Texas Bankers’ newly unopposed motion for stay pending appeal and tolled plaintiffs’ and intervenors’ deadlines for compliance with the Rule. CFPB has not since notified the court of its position. CFPB is ordered to provide the court with a status report by July 16, 2025.”

The CFPB announced in a June 18 Federal Register notice that it will postpone Section 1071 compliance dates through an Interim Final Rule. In the notice, the Bureau stated it “intends to initiate a new Section 1071 rulemaking and anticipates issuing a notice of proposed rulemaking as expeditiously as reasonably possible.” With the Court now pressing for a response, we expect to have more to report soon.