Section 1071 of the Dodd-Frank Act required the Consumer Financial Protection Bureau (CFPB) to issue rules, by July 21, 2011, to implement requirements for HMDA-like data collection and reporting for small businesses and for women-owned and minority-owned businesses. Recently the California Reinvestment Coalition, the National Association for Latino Community Asset Builders, and two individual small business owners filed suit seeking a declaration that the CFPB’s failure to issue regulations implementing Section 1071 violates the Administrative Procedure Act (APA) and an order directing the CFPB to issue such regulations within six months. Earlier this month, the plaintiffs filed a motion for summary judgment and the case was assigned to a mediator.
Now the CFPB has filed a cross-motion for summary judgment in the case. The CFPB asserts two affirmative defenses: the plaintiffs lack standing to bring the action and the APA claim is barred by the applicable statute of limitations. (That’s right, the CFPB claims that they have been so slow in issuing the regulations that the statute of limitations bars the plaintiff’s motion.)
The CFPB asserts it is not unreasonable for it to have not yet issued a Section 1071 rule because it has made considerable progress in undertaking the information-gathering necessary to support an informed rulemaking.
The CFPB intends to complete its internal policy-making process in the next six months and within six months thereafter, it expects to release a detailed outline of the proposals under consideration to be followed by a report issued by Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) panel within two months of being officially convened. The CFPB’s plan does not yet include intended dates for the issuance of a proposed or final rule. The whole process is likely to take at least two to three years.
Had the CFPB not delayed action for nine years they could have avoided the current mess. The time their legal staff is spending on filing motions could have been better spent drafting the regulations.