First Amended Complaint to Challenge Regulation B Changes to the Equal Credit Opportunity Act

FIRST AMENDED COMPLAINT

Plaintiffs Texas Bankers Association (TBA), Rio Bank, McAllen, Texas (Rio Bank), and American Bankers Association (ABA) bring this action for declaratory and injunctive relief against Defendants Consumer Financial Protection Bureau (CFPB) and Rohit Chopra (in his official capacity as Director of the CFPB). Plaintiffs specifically challenge the Final Rule issued by the CFPB on March 30, 2023 to amend Regulation B to implement changes to the Equal Credit Opportunity Act (ECOA) made by § 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).

INTRODUCTION

1. Bank loans to small businesses serve a critical role in the American economy. The total estimated value of the U.S. small business lending market is in excess of $1 trillion. And according to recent Federal Reserve data, almost 70 percent of small businesses seeking a loan applied to a bank for that type of credit.
2. Importantly—and has been consistently ignored by the CFPB during this rulemaking—small business loans play a larger role in the portfolios of smaller banks, like Rio Bank, than they do in the portfolios of large institutions. For example, the average banking organization with $1 billion or less in total assets held over 13 percent of its portfolio as small business loans in June 2021. By contrast, those with assets greater than $10 billion only held approximately 6 percent of their assets as such loans.

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