Texas Banks Sue to Block CFPB Small Business Data Collection (1)

A Texas bank and the state’s banking trade group sued to eliminate a new CFPB rule requiring lenders to collect small business loan demographic data.

Rio Bank of McAllen, Texas, and the Texas Bankers Association said in a complaint filed Wednesday that the Consumer Financial Protection Bureau shouldn’t have been able to promulgate its final small business data collection rule because a federal appeals court found that the agency’s funding structure is unconstitutional.

The US Court of Appeals for the Fifth Circuit, which covers Texas, Louisiana, and Mississippi, ruled in October that the CFPB’s independent funding through the Federal Reserve ...