Federal Judge Upholds CFPB Lending Rule

A federal judge in Texas, Randy Crane, upheld the Consumer Financial Protection Bureau's (CFPB) Small Business Lending Rule, which mandates lenders to collect and report demographic data on small business borrowers, including ownership by women and minorities. This decision follows a Supreme Court ruling affirming the CFPB's funding structure, which had previously halted the enforcement of the rule. The banking industry, including the American and Texas Bankers Associations, argued that the rule exceeded the CFPB's authority and was flawed, potentially increasing loan costs for small businesses. However, Judge Crane stated these claims were based on policy disagreements rather than legal grounds, affirming the CFPB's authority in implementing the rule under the Dodd-Frank Act. The ruling is seen as a significant victory for fair lending practices aimed at preventing discrimination against minority-owned businesses. Despite this setback, the banking groups plan to appeal the decision, maintaining their stance against the rule’s potential negative impact on financial institutions and small businesses.