WASHINGTON, D.C. — January 14, 2025 — Relman Colfax PLLC, a civil rights law firm committed to achieving justice, has filed an amicus brief in the United States Court of Appeals for the Fifth Circuit on behalf of a coalition of lenders, nonprofits, and small business advocates in support of the Consumer Financial Protection Bureau’s (CFPB) Final Rule under Dodd-Frank Section 1071.
The brief, authored by Stephen Hayes and Sacha Markano-Stark of Relman Colfax, was filed on behalf of The Responsible Business Lending Coalition; the Texas Association of Community Development Corporations; Access Plus Capital; Allies for Community Business; Finanta; Opportunity Finance Network; and Scale Link as amici curiae. The amici highlight the importance of 1071 data in ensuring transparency in small business lending, which will enable innovation, promote responsible practices, and discourage predatory behavior, including for women- and minority-owned businesses that have historically faced barriers in accessing credit.
The Final Rule reflects a nuanced approach to small business lending data collection, reducing unnecessary burdens while simultaneously requiring the collection and reporting of critical and long-awaited data, effectuating Congress’s statutory mandate in Dodd-Frank from nearly 15 years ago. Amici, which include small lenders serving underserved markets, explained to the Court that the CFPB’s requirements are a reasonable and effective way to drive innovation, enhance market competition, and protect small businesses from predatory lending.
"A key Congressional purpose of Section 1071 is to allow for the identification of the needs and opportunities of women-owned, minority-owned, and small businesses,” said Sacha Markano-Stark. "The CFPB’s rule will shine a much-needed light on the small business credit market. That transparency will help all stakeholders – including lenders – ensure that small businesses across the United States have access to fair and responsible credit products that meet their needs. Amici bring unique perspectives on how the CFPB’s rule will do just that, and we are pleased that their views will be included in this important case."
Key arguments presented in the amicus brief include:
- Encouraging Competition and Innovation: Transparency fosters opportunities for lenders to identify unmet credit needs and compete on fair terms.
- Discouraging Predatory Lending: Increased transparency reduces opportunities for harmful lending practices, particularly in vulnerable communities.
- Reducing Compliance Costs Through Regulatory Clarity: Changing the Rule now would impose costs on lenders that would be required to restructure their compliance systems.
Relman Colfax remains committed to defending fair lending laws and supporting institutions in building and maintaining compliance programs that serve all communities effectively and equitably. The firm urges the Fifth Circuit to uphold the district court’s ruling in favor of the CFPB, giving effect to Dodd-Frank Section 1071 and the protections it offers to underserved business owners across the nation.
The Relman Colfax team includes Stephen Hayes and Sacha Markano-Stark, with assistance from paralegal Esmeralda Hermosillo.