SAN ANTONIO — The National Equipment Finance Association (NEFA) plans to join efforts to prevent the Consumer Financial Protection Bureau (CFPB) from implementing Section 1071 of the Dodd-Frank Act.
Section 1071 of the Dodd-Frank Act requires financial institutions that facilitate at least 100 covered transactions to collect and report data from small business lending credit applications, according to the CFPB. Institutions, including equipment financers, who set the terms of the transaction will be required to report business and demographic information from loan applicants beginning as early as Oct. 1, 2024.
The Texas injunction covers lenders under the American Bankers Association and Texas Bankers Association, with the Equipment Leasing and Finance Association (ELFA) also looking to join the injunction through McAllen, Texas-based ELFA member Rio Bank.
“NEFA has been looking at some Texas-based companies to join us in an injunction because in order for us to jump into this, we need to find a company that operates in the fifth district to then follow up on the American Bankers and Texas Bankers filing,” NEFA Chief Executive Officer Chad Sluss said today during the 2023 NEFA Funding Symposium. “We think we found the company we’re working through for that process and are doing some final reviews.”
NEFA will use Padfield & Stout, the same law firm ELFA used, to file the injunction on behalf of its members who are not covered, Sluss said.
“We felt that there’s about 240 NEFA member companies that wouldn’t fall under the umbrella of injunctive relief, should the ELFA get that approved, or if they happen to be Texas Bankers Association members or American Bankers Association members,” he said.
NEFA expects to file the injunction as soon as next week.
“This is a process we felt very strongly that our board and us from a staff standpoint, we should jump in and get involved,” Sluss said.
Judge Karen Caldwell of the United States District Court, Eastern District of Kentucky also issued a preliminary injunction on behalf of the Monticello Banking Co., several other Kentucky banks and the Kentucky Bankers Association, according to a Sept. 14 court filing.