Last week, three farm credit trade associations filed the latest in a series of unopposed emergency motions for leave to intervene in the Texas case challenging the Consumer Financial Protection Bureau’s (“CFPB”) final small business lending rule implementing Section 1071 of the Dodd-Frank Act (Rule). The intervenors – the Farm Credit Council, Texas Farm Credit, and Capital Farm Credit (collectively, “Farm Credit Intervenors”) – argue that the Rule imposes substantial burdens on agricultural lenders and the institutions that support them, and that the members they represent will suffer disproportionately, as the majority of their loans go to small businesses, such as farmers, ranches, and agribusinesses, covered by the Rule.
As we have previously discussed, other motions to intervene have been filed and the Texas federal court has already granted the motions for leave to intervene filed by community bank and credit union intervenors and the community bank intervenors have filed a preliminary injunction motion in which the credit union intervenors have joined. In their preliminary injunction motion, the community bank and credit union intervenors ask the Texas federal court to enter a preliminary injunction prohibiting the CFPB from enforcing the Rule nationwide or, alternatively, as to the intervenors and their members. Despite having already lost the argument that preliminary relief is not warranted as to the plaintiffs, the CFPB has opposed the intervenors’ preliminary injunction motion.
The Farm Credit Intervenors asked for expedited consideration of their motion, and, like plaintiffs and other intervenors, intend to file a motion for a preliminary injunction if their motion to intervene is granted. While the court has preliminarily enjoined the CFPB from implementing and enforcing the Rule “pending the Supreme Court’s reversal of [Community Financial Services Association of America Ltd. v. CFPB], a trial on the merits of this action, or until further order of this Court” for plaintiffs and their members, the court did not grant nationwide relief when it granted plaintiff’s preliminary injunction motion on July 31, 2023. As a result, we expect to see additional parties seeking to intervene in order to obtain injunctive relief from the Rule.
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