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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS
AMARILLO DIVISION

TEXAS BANKERS ASSOCIATION,

et al.,

Plaintiffs,

v. 2:24-CV-025-Z-BR

OFFICE OF THE COMPTROLLER,

et al.,

Defendants.

MEMORANDUM OPINION AND ORDER

Before the Court is Plaintiffs’ Motion for a Preliminary Injunction (“Motion”) (ECF No. 19),

filed February 9, 2024. Defendants filed their response (“Response”) (ECF No. 66), on March 8, 2024.

Having reviewed the briefing and relevant law, the Court GRANTS Plaintiffs’ Motion. Defendants are

hereby ENJOINED from enforcing the regulations published at 89 Fed. Reg. 6574 (Feb. 1, 2024)

(to be codified at 12 C.F.R. Sections 25, 228, and 345) against Plaintiffs pending the resolution of this

lawsuit. The effective date of April 1, 2024, along with all other implementation dates, are hereby

EXTENDED, day for day, for each day this injunction remains in place.

BACKGROUND

The Community Reinvestment Act of 1977 (“CRA”) was enacted to address “redlining” —

the practice of refusing credit in neighborhoods “deemed too risky.” ECF No. 4 at 3. Historically,

these neighborhoods were “predominantly minority and inner city.” ECF No. 20 at 9; R. MARSICO,

DEMOCRATIZING CAPITAL: THE HISTORY, LAW AND REFORM OF THE COMMUNITY REINVESTMENT ACT

11 (2005). The CRA requires federal banking agencies (“FBAs”) to assess an institution’s record “of

meeting the credit needs of its entire community, including low- and moderate-income” neighborhoods.
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12 U.S.C. § 2903(a)(1). And it requires separate evaluations for each metropolitan area where an

institution maintains one or more branch offices. Id. § 2906(b)(1)(B). Those evaluations, in turn,

result in one of four ratings: “Outstanding,” “Satisfactory,” “Needs to Improve,” or “Substantial

noncompliance.” Id. § 2906(b)(2)(A)–(D).1

By most measures, the CRA achieved its goals: “For more than 45 years, banks have extended

trillions of dollars of credit to . . . low- and moderate-income individuals in their communities.”2

ECF No. 20 at 10. In 2022 alone, “banks provided more than $227 billion in capital to low- and

moderate-income individuals and businesses.” Id. And they provided “an additional $151 billion in

community development loans.” Id.; see also Federal Financial Institutions Examination Council,

Federal Bank Regulatory Agencies Release 2022 Lending Data, Dec. 20, 2023.

On February 1, 2024, Defendants — a collection of FBAs — published new regulations.

ECF No. 20 at 7; see 89 Fed. Reg. 6574 (to be codified at 12 C.F.R. §§ 25, 228, and 345).

Spanning 649 triple-column pages, those regulations (“Final Rules”) are “by far the longest rulemaking”

the Federal Deposit Insurance Corporation (“FDIC”) has ever issued.3 ECF No. 20 at 11. They establish,

inter alia, four new performance tests — two of which are relevant here. ECF Nos. 20 at 5–6; 67 at 14.

1
The CRA was predicated on Congress’s finding that regulated financial institutions have an “affirmative obligation
to help meet the credit needs of the local communities in which they are chartered.” 12 U.S.C. § 2901(a)(3).
2
Some commentators nevertheless argue that the CRA did not go far enough. See Kim Vu-Dinh, Black Livelihoods
Matter: Access to Credit as a Civil Right and Striving for a More Perfect Capitalism Through Inclusive Economics,
22 HOUS. BUS. & TAX L. J. 1, 28 (2021) (“The Community Reinvestment Act . . . was created in 1977 in order to
remediate the longstanding practice of redlining but is characterized as ‘toothless.’ It was intended to hold banks
accountable for the effects of their historic disinvestment in the neighborhoods in which communities of color lived
and owned businesses. However, the standards to which banks are held under the CRA are vague at best.”); see also
Erika George et al., Reckoning: A Dialogue About Racism, Antiracists, and Business & Human Rights,
30 WASH. INT’L L. J. 171, 254 n.257 (2021) (“While technically outlawed in 1977 with the Community Reinvestment
Act of 1977, studies indicate that redlining continues to affect housing opportunities and even health outcomes.”).
3
According to FDIC Director Jonathan McKernan — who dissented when the FDIC voted in favor of the Final Rules
— “[t]he approximately 60,000 words of rule text (including appendices), which contains more than 40 benchmarks
and 20 metrics, are enough to preclude anyone from comprehending the rule as a whole.” ECF No. 20 at 11.
“More problematically,” he continued, “big chunks of the rule remain unfinished works in progress.” Id.

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The first test — the Retail Lending Test — uses retail lending assessment areas (“RLAAs”) and

outside retail lending assessment areas (“ORLAs”) to evaluate a bank’s retail lending. ECF No. 67

at 14–15. An RLAA “consists of any metropolitan statistical area or the combined non-metropolitan

statistical areas of a state” in which a bank “originated at least 150 closed-end home mortgage loans” or

“400 small business loans in each of the two preceding calendar years.” ECF No. 20 at 12; see also

89 Fed. Reg. 6574, 6577. Likewise, an ORLA “is the nationwide area outside” a bank’s Facility

Based Assessment Areas (“FBAAs”) and RLAAs “where it made any other CRA-relevant loans.”

ECF No. 20 at 12; see also 89 Fed. Reg. 6574, 6577 (“Evaluation in these areas is designed to facilitate

a comprehensive evaluation of a bank’s retail lending to low- and moderate-income individuals . . . .”).

In other words, neither RLAAs nor ORLAs have any connection whatsoever to “a bank’s physical,

deposit-taking footprint.” ECF No. 20 at 12.

The second test — the Retail Services and Products Test — requires the FBAs to assess the

availability and usage of a bank’s deposit products and “whether [those] . . . deposit products offer low-

cost features.” ECF No. 67 at 16. As for digital services, the Final Rules require the FBAs to consider

“[t]he number of checking and savings accounts opened each calendar year during the evaluation period

digitally and through other delivery systems in low-, moderate-, middle-, and upper-income census

tracts” and the accounts active at year-end. Id. at 17; 89 Fed. Reg. 6574, 7121.

Plaintiffs argue the Final Rules run afoul of the CRA by analyzing banks (1) outside the

geographies where they operate physical facilities and accept deposits; and (2) on deposit products —

not how they meet the credit needs of the community. ECF No. 20 at 8. Defendants respond that

(1) the CRA “requires the FBAs to assess a bank in its ‘entire community,’ which includes all

geographic areas where the bank serves customers,” and (2) Plaintiffs fail to demonstrate irreparable

injury, or that the “balance of equities and the public interest” support their Motion. ECF No. 67 at 48.
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STANDARDS

A preliminary injunction may be issued if the movant shows: (1) a substantial likelihood

of prevailing on the merits; (2) a substantial threat of irreparable injury if the injunction is not

granted; (3) the threatened injury outweighs any harm that will result to the non-movant if the

injunction is granted; and (4) the injunction will not disserve the public interest. Robinson v.

Ardoin, 86 F.4th 574, 587 (5th Cir. 2023); Air Prod. & Chemicals, Inc. v. Gen. Servs. Admin.,

No. 2:23-CV-147-Z, 2023 WL 7272115, at *2 (N.D. Tex. Nov. 2, 2023).

The first two factors are most critical, and the latter two merge when the government is an

opposing party. Valentine v. Collier, 956 F.3d 797, 801 (5th Cir. 2020); Nken v. Holder, 556 U.S.

418, 435 (2009). That said, no factor has a “fixed quantitative value.” Mock v. Garland, 5 F.4th

563, 587 (5th Cir. 2023). On the contrary, “a sliding scale is utilized, which takes into account the

intensity of each in a given calculus.” Id. “This requires a delicate balancing of the probabilities of

ultimate success at final hearing with the consequences of immediate irreparable injury that

possibly could flow from the denial of preliminary relief.” Med-Cert Home Care, LLC v. Azar,

365 F. Supp. 3d 742, 749 (N.D. Tex. 2019) (internal marks omitted). In sum, “[t]he decision to

grant or deny a preliminary injunction lies within the sound discretion of the trial court[.]”

White v. Carlucci, 862 F.2d 1209, 1211 (5th Cir. 1989); Cottonwood Fin. Ltd. v. Cash Store Fin.

Servs., Inc., 778 F. Supp. 2d 726, 741 (N.D. Tex. 2011).

ANALYSIS

I. Plaintiffs have associational standing.

Standing is a threshold question this Court must address before addressing the merits.

People for the Ethical Treatment of Animals, Inc. v. U.S. Dep’t of Agric., 7 F. Supp. 3d 1, 7 (D.D.C.

2013) (citing Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 102 (1998)). Under the doctrine
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of associational standing, an association may bring suit on behalf of its members when (1) those

members would otherwise have standing to sue; (2) the interests it seeks to protect are germane to

the organization’s purpose; and (3) neither the claim asserted nor the relief requested requires the

participation of individual members. Hancock Cnty. Bd. of Sup’rs v. Ruhr, 487 F. Appx. 189, 195

(5th Cir. 2012) (citing Ass’n of Am. Physicians & Surgeons, Inc. v. Tex. Med. Bd., 627 F.3d 547,

550 (5th Cir. 2010)).

Here, Defendants aver that Plaintiffs lack standing for two reasons: (1) they have not

identified by name at least one member with standing in their own right; and (2) they do not assert

that the challenged activity affects all members of their associations. 4 ECF No. 67 at 40.

Both objections fail.

First, Defendants rely — almost exclusively — on Summers v. Earth Island Institute.

555 U.S. 488 (2009). But Summers does not hinge on the anonymity of the declarant. 5 Id. at 495.

Instead, the Supreme Court denied standing because the plaintiffs failed “to allege that any

particular . . . sale or other project claimed to be unlawfully subject to the regulations [would]

impede a specific and concrete plan.” Id. (emphasis in original). Nor has the Supreme Court

adopted a “naming requirement” — such as the one proposed by Defendants — in the wake of

Summers. See, e.g., Students for Fair Admissions, Inc. v. Harvard, 600 U.S. 181, 200–201 (2023)

(holding that an organization had standing “when it filed suit” where it “identified” individual

harmed members but did not provide names).

4
Here, Defendants take issue with Plaintiffs’ use of anonymous declarations and statements. See ECF No. 67 at 41
(“Plaintiffs submitted unsworn statements from three anonymous bankers purporting to be members of one or more
of the plaintiff associations.”).
5
The Tenth Circuit recognized that “[a]nonymity was not even an issue before the Supreme Court in Summers.”
Speech First, Inc., 92 F.4th at 949. “Although one might read language in that opinion to require that only persons
identified by their legal names can have standing, that was clearly not the intent of the Court.” Id. “The opinion
provided no hint, much less an emphatic statement, that it was abrogating decades of precedent.” Id.
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Defendants also misstate and misapply Funeral Consumers All., Inc. v. Serv. Corp. Int’l,

695 F.3d 330, 344 (5th Cir. 2012). There, the Fifth Circuit explained an organization lacks standing

“if it fails to adequately ‘allege . . . there is a threat of . . . injury to any individual member of the

association’ and thus ‘fail[s] to identify even one individual’ member with standing.” Id. (quoting

Nat’l Treasury Employees Union v. U.S. Dep’t of Treasury, 25 F.3d 237, 242 (5th Cir.1994)).

But nothing in Funeral Consumers addressed — or even purported to address — the sufficiency

of anonymous or pseudonymous declarations to establish standing.

In sum, the proffered Supreme Court and Fifth Circuit precedents do not support

Defendants’ “identify-by-name” requirement. See Hancock Cnty. Bd. of Sup’rs, 487 F. Appx. at

195 (affirming use of anonymous declarations); Speech First, Inc. v. Fenves, 979 F.3d 319, 335

(5th Cir. 2020), as revised (Oct. 30, 2020) (holding same); Blanchard v. Bergeron, 489 U.S. 87

(1989). Other Circuits have reached the same conclusion. See, e.g., Speech First, Inc. v. Shrum, 92

F.4th 947, 949 (10th Cir. 2024) (“Longstanding and well-established doctrine in the federal courts

establishes that anonymous persons may have standing to bring claims.”). Other District Courts in

Texas hold the same. See, e.g., Chamber of Com. of U.S. of Am. v. Consumer Fin. Prot. Bureau,

No. 6:22-CV-00381, 2023 WL 5835951, at *6 (E.D. Tex. Sept. 8, 2023) (“[D]efendants argue that

no plaintiff has shown that an ‘identified member’ suffers harm because some plaintiffs have used

pseudonyms . . . . That argument fails.”); id. (finding that anonymous declarations “credibly show

that plaintiffs have identified members . . . currently suffering cognizable harm”).

Defendants’ second objection — that Plaintiffs “do not assert that the challenged activity

affects all members of their associations”— is no more successful. That is because “the presence

of one party with standing is sufficient to satisfy Article III’s case-or-controversy requirement.”

Nat’l Horsemen’s Benevolent & Protective Ass’n v. Black, 53 F.4th 869, 880 (5th Cir. 2022);
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Nuziard v. Minority Bus. Dev. Agency, No. 4:23-CV-0278-P, 2023 WL 3869323, at *3 (N.D. Tex.

June 5, 2023). And here, the Texas Bankers Association “has 20 members with over $10 billion in

assets” — and those banks with less than $10 billion “may [nevertheless] be assessed under these

tests[.]” ECF No. 73 at 23; 89 Fed. Reg. 6574, 7121.

II. Plaintiffs demonstrate a substantial likelihood of success on the merits.

A. The FBAs’ reading of “entire community” clashes with the text of the CRA.

Plaintiffs first argue that the Final Rules violate the CRA’s instruction to assess banks

based only on their performances within their communities. ECF No. 20 at 17. In their view,

a bank’s community is “the geograph[y] in which [it has] a physical presence and accept[s]

deposits.” Id. at 8; see also id. at 17 (“[T]he CRA focuses on lending in the particular, defined,

and limited geographic areas in which a bank’s deposit-taking facilities are located.”); id. at 17

(“The [a]gencies have always required bank examiners to focus on bank-designated ‘assessment

areas,’ which are ‘geographies in which the bank has its main office, its branches, and its deposit-

taking ATMs[.]”) (quoting 12 C.F.R. §§ 228.41(a)–(b) and (g)).

Defendants respond that the CRA “take[s] an expansive view in assessing a bank’s

performance[.]” ECF No. 67 at 21. That “expansive” view, in turn, is predicated on the CRA’s

usage of the phrase “entire community.” Id. (emphasis added); see also 12 U.S.C. § 2903(a)(1).

Accordingly, Defendants claim authority to articulate — via the Final Rules — “that a bank’s

‘entire community’ includes both the geographic areas where a bank maintains deposit-taking

facilities and other geographic areas where a bank conducts retail lending.” ECF No. 67 at 21–22

(emphasis added). Such authority is necessary, per Defendants, because “federal agencies are

expected to update rules” in response to changes. Id. at 26. And here, those changes include how

a “community exists today.” Id. at 26–28.

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Because this is a question of statutory interpretation, the Court begins with the text.

United States v. Lauderdale Cnty., Miss., 914 F.3d 960, 961 (5th Cir. 2019). When a statute

includes an explicit definition, the Court follows that definition — even if it varies from a term’s

ordinary meaning. Digital Realty Tr., Inc. v. Somers, 583 U.S. 149, 160 (2018). Here, all parties

agree the CRA does not define “community.” See ECF No. 20 at 16 (“Congress did not itself

define the word ‘community[.]’”); see also ECF No. 67 at 30 (“The FBAs’ Final Rule appl[ies]

the undefined term ‘entire community’”). Thus, this Court “begin[s] with the assumption that the

words were meant to express their ordinary meaning.” United States v. Kaluza, 780 F.3d 647, 659

(5th Cir. 2015); United States v. Boeing Co., 617 F. Supp. 3d 502, 508 (N.D. Tex. 2022).

Here, the text reads as follows:

In connection with its examination of a financial institution, the appropriate Federal

financial supervisory agency shall — (1) assess the institution’s record of meeting
the credit needs of its entire community, including low- and moderate-income
neighborhoods, consistent with the safe and sound operation of such institution[.]

12 U.S.C. § 2903(a)(1).

That the word “community” necessarily involves a limited geographic area is indisputable.

Webster’s Third New International Dictionary defines “community” as “the people living in a

particular place or region and usually linked by common interests.” Alternatively, it is

“an aggregation of mutually related individuals in a given location.” Community, WEBSTER’S

THIRD NEW INTERNATIONAL DICTIONARY (2002). And even today, “community” is defined in

nearly identical ways: “the people with common interests living in a particular area” and a

“population of various kinds of individuals . . . in a common location.” Community, MERRIAM-

WEBSTER, www.merriam-webster.com/dictionary/community, 2024; see also Community,

BLACK’S LAW DICTIONARY (11th ed. 2019) (“A neighborhood, vicinity, or locality.”).

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The remaining question — and the question that divides the Parties — is whether a bank’s

community is defined in relation to (1) a bank’s physical location, or (2) where a bank serves its

customers. See ECF No. 20 at 7 (“The statute . . . imposes obligations on banks with respect to

credit needs of the communities in which they have a physical presence and accept deposits.”);

see also ECF No. 67 at 31 (“[T]he Final Rule is focused on . . . geographic areas where a bank

serves its customers.”). Plaintiffs have the stronger argument.

First, Defendants lean hard on the word “entire” in the phrase “entire community.”

See ECF No. 67 at 22 (“Plaintiffs fail to meet their heavy burden . . . because their theory ignores

that the term ‘entire’ modifies ‘community.’”). True, “[t]he word ‘entire,’ . . . should not be read

out of [the statute].” Stewart v. Metro. Lloyds Ins. Co. of Tex., 855 F. Appx. 198, 201 (5th Cir.

2021). But it does not have the effect Defendants attribute to it. In modifying “community,” the

word “entire” merely clarifies that the whole community must be served — it does not change

what a “community” is. If a statutory “community” is created around every individual customer

with whom a bank does business — regardless of whether that customer is within the geography

of the bank’s physical presence — the term becomes meaningless and the statute ineffectual.

Accordingly, Congress expressly stated in Section 2901(a)(3) — the CRA’s

“Congressional findings and statement of purpose” section — that “regulated financial institutions

have [a] continuing and affirmative obligation to help meet the credit needs of the local

communities in which they are chartered.” 12 U.S.C. § 2901(a)(3). And Section 2901(b) repeats

that language. See id. § 2901(b) (“It is the purpose of this chapter to require each appropriate . . .

agency to . . . encourage such institutions to help meet the credit needs of the local communities

in which they are chartered[.]”). Defendants disregard these examples because “a statement of

congressional findings is a rather thin reed upon which to base a requirement neither expressed
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nor fairly implied from the Act’s operative sections.” Nat’l Org. for Women, Inc. v. Scheidler, 510

U.S. 249, 250 (1994) (emphasis added). Defendants’ argument would prevail if Plaintiffs’ reading

of “community” was “neither expressed nor fairly implied” elsewhere in the CRA. But Plaintiffs’

reading is more consistent with the totality of the CRA’s text.

For starters, Section 2903 — the same section on which Defendants ground their “entire

community” argument — provides that the FBAs “may consider as a factor capital investment,

loan participation, and other ventures undertaken by the institution” provided these activities “help

meet the credit needs of local communities in which such institutions and credit unions are

chartered.” 12 U.S.C. § 2903(b) (emphasis added). And “local” is ordinarily defined as: (1) “not

general or widespread” and (2) “primarily serving the needs of a particular limited district, often a

community or minor political subdivision . . . applicable in or relating to such a district only.”

Local, WEBSTER’S COLLEGIATE DICTIONARY (1974); Local, WEBSTER’S THIRD NEW

INTERNATIONAL DICTIONARY (1981). Moreover, Section 2906 directs the FBAs to separately

address “each metropolitan area in which a regulated depository institution maintains one or more

domestic branch offices.” 12 U.S.C. § 2906(b)(1)(B).

These sections underscore the CRA’s focus on geographic areas surrounding a bank’s

physical facilities. Otherwise, Congress’s repeated focus on “local communities,” “low- and

moderate-income neighborhoods,” and “metropolitan areas” with “domestic branch offices” is

inexplicable. See A. SCALIA & B. GARNER, READING LAW: THE INTERPRETATION OF LEGAL TEXTS

167 (2012) (“[T]he whole-text canon . . . calls on the judicial interpreter to consider the entire text,

in view of its structure and of the physical and logical relation of its many parts[.]”); K Mart Corp.

v. Cartier, Inc., 486 U.S. 281, 291 (1988) (explaining that courts must look to “the language and

design of the statute as a whole”).

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Finally, and perhaps most persuasively, Section 2902(4) undermines Defendants’ reading.

It expressly states:

A financial institution whose business predominately consists of serving the needs

of military personnel who are not located within a defined geographic area may
define its “entire community” to include its entire deposit customer base without
regard to geographic proximity.

12 U.S.C. § 2902(4).

In other words, if a bank primarily serves customers not clustered near its physical facility

— e.g., military personnel stationed across the globe — then it can “define its ‘entire community’”

pursuant to wherever its customers happen to be. But not otherwise. See Baptist Mem’l Hosp. -

Golden Triangle, Inc. v. Azar, 956 F.3d 689, 694 (5th Cir. 2020) (“[T]he canon of Expressio Unius

Est Exclusio Alterius . . . provides that ‘expressing one item of [an] associated group or series

excludes another left unmentioned.’”). To be sure, “a ‘proper expressio unius inference’ as to a

specific statutory provision’s exclusivity must consider the provision as ‘viewed in the context of

the overall statutory scheme.’” Janvey v. Democratic Senatorial Campaign Comm., 793 F. Supp.

2d 825, 845 (N.D. Tex. 2011) (quoting Christensen v. Harris County, 529 U.S. 576, 583 (2000)).

But “the context of the overall statutory scheme” — for all the reasons discussed supra — serves

only to strengthen Plaintiffs’ interpretation of “community.”

Next, Defendants turn to a tool disfavored by textualists: legislative history. See, e.g.,

Thomas v. Reeves, 961 F.3d 800, 819 (5th Cir. 2020) (“Scouring legislative detritus prone to

contrivance is more likely to yield confusion than precision.”) (citing Zedner v. United States, 547

U.S. 489, 511 (2006) (Scalia, J., concurring) (“[T]he use of legislative history is illegitimate and

ill-advised in the interpretation of any statute.”). Here, Defendants cite (1) preliminary drafts of

the CRA, (2) a series of edits made to those drafts prior to the CRA’s finalization, and

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(3) legislators’ discussions memorialized in the Congressional Record. ECF No. 67 at 24–26.

From these suspect sources, Defendants divine that the FBAs may analyze banks “where they

lend” — not just in areas with deposit-taking facilities. Id. at 26.

But “legislative history is not the law.” Epic Sys. Corp. v. Lewis, 584 U.S. 497, 523 (2018);

see also Wooden v. United States, 595 U.S. 360, 381 (2022) (Barrett, J., concurring) (explaining

that “the problems with legislative history are well rehearsed”); A. SCALIA & B. GARNER, supra

46 (2012) (“In the interpretation of legislation, we aspire to be ‘a nation of laws, not of men.’

This means . . . giving no effect to lawmakers’ unenacted desires.”). And whatever value legislative

history may have generally, there is none when the statutory text is clear. See Adkins v. Silverman,

899 F.3d 395, 403 (5th Cir. 2018) (“[T]he Supreme Court has stated repeatedly that where a

statute’s text is clear, courts should not resort to legislative history.”) (citing BedRoc Ltd., LLC v.

United States, 541 U.S. 176, 186 (2004)). Because “[t]he text here is not ambiguous,” this Court

declines to “introduce ambiguity through the use of legislative history.” Adkins, 899 F.3d at 403.

B. The CRA does not authorize the FBAs to assess deposit products.

Plaintiffs next argue that the Final Rules err in authorizing the FBAs to assess deposit

products. ECF No. 20 at 22. They aver that “Congress knew the difference between ‘credit’ and

‘deposit’ activities” — and nevertheless instructed the FBAs only to “assess the institution’s record

of meeting the credit needs of its entire community.” Id. (quoting 12 U.S.C. § 2903(b)(1)).

“That focus on credit makes sense,” according to Plaintiffs, “as Congress was concerned about the

mismatch between banks accepting deposits from low- and moderate-income borrowers but not

serving those borrowers with their credit products.” ECF No. 20 at 22. In light of the foregoing,

Plaintiffs conclude that Defendants have impermissibly “enlarge[d] the authority granted” by the

statute. Id. at 23.

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Defendants respond with two arguments: (1) the CRA does not state that only certain

factors may be considered in evaluating whether a bank is “meeting the credit needs of its entire

community;” and (2) the FBAs have reasonably explained why evaluating deposit activities is

appropriate in determining whether a bank is “meeting the credit needs of its entire community.”

ECF No. 67 at 34–37. In their view, Plaintiffs “have provided no basis for construing the phrase

‘meeting the credit needs of its entire community’ to allow for consideration only of factors that

Plaintiffs have selected.” Id. at 36–37. And in any event, “the FBAs described in great detail why

evaluating deposit activities is appropriate.” Id. at 37.

This question is resolved via the statutory provisions already addressed. In review,

institutions shall “help meet the credit needs of the local communities in which they are chartered.”

12 U.S.C. § 2901. The FBAs shall “assess the institution’s record of meeting the credit needs of

its entire community, including low- and moderate-income neighborhoods.” Id. § 2903(a)(1).

They may consider as a factor “capital investment, loan participation, and other ventures

undertaken by the institution” provided that these activities “help meet the credit needs of local

communities.” Id. § 2903(b). And each rating assigned to an institution — “Outstanding,”

“Satisfactory,” “Needs to improve,” or “Substantial noncompliance” — are predicated on how

well the institution met “community credit needs.” Id. § 2906(2). The pattern is obvious: not a

single foregoing provision — nor any other CRA provision — authorizes the FBAs to assess

deposit products.

Nevertheless, Defendants aver that the phrase “credit needs” is sufficiently broad to

encompass “what is requisite, desirable, or useful in connection with credit.” ECF No. 67 at 34.

They argue that “[t]here is a sufficient nexus between deposit products and the provision of credit

such that, to comprehensively assess large bank performance . . . it is appropriate to evaluate

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deposit accounts responsive to the needs of low- and moderate-income individuals, families, or

households.” Id. at 37. And they explicate that nexus throughout the Final Rule:

[D]eposit products are important for supporting the credit needs of low- and
moderate-income individuals, families, or households because they increase credit
access by helping individuals improve their financial stability and build wealth
through deposit accounts.

89 Fed. Reg. 6574, 6943.

[D]eposit products can help consumers qualify for loans by facilitating consumers’
savings so that they can post collateral and to pay transactions costs . . . . [and] may
also assist consumers in improving their credit scores . . . . Data from consumers’
use of deposit accounts are also sometimes included in credit evaluations as
“alternative data.”

89 Fed. Reg. 6574, 6944.

[D]eposit products are a pathway for a bank customer to establish an ongoing

relationship with a bank. Customers who hold deposit products have contact with a
bank — either physically or electronically — every time they perform a transaction.
Banks can use various touch points to market credit products, explain how credit
products can help consumers meet financial needs, and provide services to improve
consumers’ financial literacy.

Id.

But Defendants miss the mark. The question is not whether the FBAs “have articulated a

rational relationship” between deposit products and the ability to access credit. ECF No. 67 at 34.

It is not whether “a sufficient nexus” exists. Id. at 37. Nor is it whether the FBAs’ evaluation of

deposit products is a good idea. The question is whether Congress authorized the FBAs to do so.

The totality of the statutory text weighs in the opposite direction.

Congress expressly stated that “the convenience and needs of communities include the

need for credit services as well as deposit services.” 12 U.S.C. § 2901(a)(2) (emphasis added).

It did not forget about them. Yet in every operative provision, Congress specified that only credit

need be considered. See, e.g., 12 U.S.C. §§ 2903(a)(1); 2903(b); 2906(2)(A)–(D). Hence, the
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inescapable conclusion is “that Congress considered the unnamed possibility and meant to say no

to it.” Barnhart v. Peabody Coal Co., 537 U.S. 149, 168 (2003); Gulf Fishermens Ass’n v. Nat’l

Marine Fisheries Serv., 968 F.3d 454, 466 (5th Cir. 2020). Whatever weight is assigned the FBAs’

alleged “nexuses,” it cannot “overcome the clear contrary indications of the statute[.]” S.E.C. v.

Sloan, 436 U.S. 103, 117 (1978).

C. The Major Questions Doctrine weighs in favor of Plaintiffs.

Under the Major Questions Doctrine, courts “expect Congress to speak clearly if it wishes

to assign to an agency decisions of vast economic and political significance.” Util. Air Regul. Grp.

v. E.P.A., 573 U.S. 302, 324 (2014); W. Virginia v. E.P.A., 597 U.S. 697, 716 (2022).

Stated differently, an agency must “point to clear congressional authorization” when “the history

and the breadth of the authority that the agency has asserted, and the economic and political

significance of that assertion, provide a reason to hesitate before concluding that Congress meant

to confer such authority.” W. Virginia, 597 U.S. at 721 (citing Food & Drug Admin. v. Brown &

Williamson Tobacco Corp., 529 U.S. 120, 160 (2000)).

Here, the “breadth of authority” that Defendants assert is substantial. See United States v.

Philadelphia Nat. Bank, 374 U.S. 321, 329 (1963) (recognizing that the “power of federal bank

examiners” is “perhaps the most effective weapon of federal regulation”). Never before have the

FBAs claimed authority to assess banks wherever they conduct retail lending. ECF No. 73 at 16.

On the contrary, they have — since 1978 — limited themselves to areas surrounding deposit-

taking facilities. Id. at 16–17; 43 Fed. Reg. 47144, 47144 (Oct. 12, 1978); Interagency Questions

and Answers, 57 Fed. Reg. 10899, 10899 (Mar. 31, 1992).

Moreover, Congress could have passed legislation to alter or expand the CRA’s terms.

As Plaintiffs note, the Community Reinvestment Modernization Act — introduced four times in
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nine years — “would have shifted assessment areas from those areas surrounding deposit-taking

facilities to areas where banks make loans.” ECF No. 73 at 17. It never passed. Thus, the fact that

“Congress considered and rejected bills that would have granted the [FBAs] such jurisdiction”

undercuts their assertion of authority. Brown & Williamson Tobacco Corp., 529 U.S. at 144.

The foregoing — taken together — provide a powerful basis for applying the Major Questions

Doctrine in favor of Plaintiffs. This Court does so.

III. Plaintiffs demonstrate a substantial threat of irreparable injury.

Next, Plaintiffs argue that the Final Rules “are of such scale and complexity that banks

must take immediate steps” to comply. ECF No. 20 at 25. And those steps, they argue, require

“substantial costs that will be unrecoverable even if the [Rules] are struck[.]” Id. at 26. In support,

Plaintiffs cite the Office of the Comptroller of the Currency’s (“OCC”) “estimate[] [of] the initial

compliance burden in the first 12 months” as $91.8 million. 6 Id. at 24. They point to

“complicated[,] time-consuming system overhauls and database updates” and the need to “conduct

program planning,” upgrade “vendor relationships, [and] hire more IT.” Id. And they underscore

the FBAs’ estimate that banks “will expend between . . . 105,500 and 235,000 hours in reporting,

recordkeeping, and disclosures.” Id. at 25. Defendants aver that Plaintiffs have not proved

“irreparable harm” because the alleged compliance costs (1) are not contextualized alongside the

banks’ overall finances; and (2) are too vague and speculative to satisfy “concreteness” standards.

ECF No. 67 at 43–45.

6
This figure has been recontextualized. See ECF No. 70 (Defendants’ Notice of Supplemental Rulemaking). The OCC
now clarifies that “[w]ere the [Rule] to require full compliance within the first 12 months of the transition period,
the OCC estimates that expenditures to comply with mandates during those twelve months would not exceed
approximately $91.8 million (approximately $7.9 million associated with increased data collection, recordkeeping or
reporting; $82 million for large banks to collect, maintain, and report annually geographic data on deposits; and $1.9
million for banks’ strategic plan submissions).” Community Reinvestment Act; Supplemental Rule, https://www.fdic
.gov/news/press-releases/2024/pr24018a.pdf.
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First, compliance costs. Defendants aver that Plaintiffs “have failed to provide necessary

context for their asserted compliance burdens ‘in relation to the overall financial situation’ of their

members.” Id. at 43 (quoting Nat’l Council of Agric. Emps. v. U.S. Dep’t of Lab., No. CV 22-3569

(RC), 2023 WL 2043149, at *7 (D.D.C. Feb. 16, 2023). In their view, “Plaintiffs must compare

those costs to affected banks’ overall economic positions, by considering, for example, banks’ total

noninterest expenses” to “demonstrate that any asserted compliance costs are more than de

minimis[.]” ECF No. 67 at 43.

True, compliance costs must be “more than de minimis.” Louisiana v. Biden, 55 F.4th 1017,

1035 (5th Cir. 2022); Second Amend. Found., Inc. v. Bureau of Alcohol, Tobacco, Firearms &

Explosives, No. 3:21-CV-0116-B, 2023 WL 7490149, at *14 (N.D. Tex. Nov. 13, 2023).

But under Fifth Circuit precedent, “nonrecoverable costs of complying with a putatively invalid

regulation typically constitute irreparable harm.” Rest. L. Ctr. v. U.S. Dep’t of Lab., 66 F.4th 593,

597 (5th Cir. 2023); see also Louisiana, 55 F.4th at 1034 (“[C]omplying with a regulation later

held invalid almost always produces the irreparable harm of nonrecoverable compliance costs.”).

And there is no reason — in fact or in law — to view Plaintiffs’ claims as atypical.

Moreover, the “key inquiry” here is “not so much the magnitude but the irreparability.”

Rest. L. Ctr., 66 F.4th at 597. Indeed, “[e]ven purely economic costs may count as irreparable harm

‘where they cannot be recovered in the ordinary course of litigation.’” Id. (quoting Wis. Gas Co.

v. FERC, 758 F.2d 669, 674 (D.C. Cir. 1985)). And Plaintiffs’ compliance costs — as pled — fall

into the standard “nonrecoverable costs” category recognized repeatedly by the Fifth Circuit.

See, e.g., ECF No. 21 at 9 (Declaration of Texas Bankers Association) (“To comply with the

[Rules], TBA members have begun incurring nonrecoverable compliance costs, including

building out new information technology capabilities in order to geocode their deposits and
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track new metrics adopted by the [Rules].”); id. at 15 (Declaration of Jason Harrison)

(“Despite a 2-year applicability period for most of the provisions in the [Rules], the [Rules’] new,

burdensome metrics and data collection requirements will require some affected members to begin

incurring compliance costs long before Plaintiffs could obtain a final judgment . . . . The

implementation task here will be even more expensive and daunting because banks may need to

implement both Section 1071 regulations and the amended CRA regulations on overlapping

timelines.”); id. at 22 (Declaration of American Bankers Association) (“Intermediate and Large

banks must begin implementation immediately due to the complexity and extensive change-

management processes that will be required to comply with the [Rules]. Banks must take steps now

to determine whether they will have Retail Lending Assessment Areas” or “Outside Lending

Assessment Areas,” and “then calculate whether their CRA performance will be adequate under

the [Rules’] performance metrics.”); id. at 30 (Declaration of Thomas Quaadman) (“Members thus

have already begun to take the necessary steps to understand the voluminous requirements, prepare

their budgets for implementation, and make decisions about whether they will hire new in-house

technical personnel or outside vendors to assist with implementation.”); id. at 37–38 (Declaration

of Kelly Hall) (“As acknowledged by the Agencies, even setting aside the technical changes that

will need to be made to comply with the data collection, maintenance, and reporting requirements,

some of our members will need to hire new CRA compliance personnel going forward because of

the enormous complexity of the [Rules] and the increased size and number of assessment areas.”);

id. at 46 (Declaration of Independent Community Bankers of America) (“Some member banks

report that, to meet the January 1, 2026 implementation deadline, they have begun or will need

to immediately begin undertaking rigorous efforts to understand and comply with the [Rules],

initiate change-management processes, and make changes to their overall business strategy.
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All of these efforts will result in the banks incurring nonrecoverable compliance costs.”);

id. at 51 (Declaration of Independent Bankers Association of Texas) (“IBAT member banks have

already begun their efforts to determine whether they will need to make changes to their CRA

compliance efforts with regard to accounting for the new Facility-Based Assessment Areas, Retail

Lending Assessment Areas, and/or Outside Retail Lending Areas. These determinations will be

necessary prior to the implementation of the rule for a bank to evaluate whether its CRA

performance will be adequate under the [Rules]” . . . . “ The costs incurred by banks in making

these determinations is ongoing and will increase as we approach the effective date for

implementation of the rule. IBAT member banks do not expect that these costs will be recoverable

even if the [Rules] are struck down due to sovereign immunity and other considerations.”).

Second, the concreteness of Plaintiffs’ allegations. As referenced supra, Defendants aver

that Plaintiffs “have failed to meet their burden of establishing imminent nonrecoverable

compliance costs stemming from activities to prepare for the Final Rule.” ECF No. 67 at 48.

Such activities, per Defendants, “are vague, unsupported, and contrary to the language in the Final

Rule.” Id. Specifically, they argue that (1) “the [Final Rule’s] actual regulatory text is marked by

none of the extreme urgency Plaintiffs claim they now face;” (2) “the preamble indicates that

implementation guidance and tools are forthcoming from the FBAs with respect to data collection,

maintenance and reporting for large banks;” (3) “while declarants raise vague, alarmist assertions

about immense complexity necessitating immediate action with respect to new RLAAs, no

declarant specifies a single RLAA that any of Plaintiffs’ member banks anticipate it will need to

delineate;” and (4) “conclusory statements of multiple declarants that a large bank will need to

‘build out new CRA infrastructure’ . . . contradict the text of the Final Rule.” Id. at 46–47.

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But Defendants misconstrue both Plaintiffs’ claims and the precedent that supports them.

First — as described supra — the Fifth Circuit has long held that “complying with a regulation

later held invalid almost always produces the irreparable harm of nonrecoverable compliance

costs.” Louisiana, 55 F.4th at 1034. Second, that the Rule is not marked by urgency is plainly false.

The text itself provides that “this final rule will be effective on April 1, 2024” — with an

operational start date of January 1, 2026, and reporting requirements kicking in a year later.

89 Fed. Reg. 6574, 7107. Given the scope of Plaintiffs’ operations and the changes required by the

Final Rule, the necessity of swift action is obvious. Third, Plaintiffs’ assertions are neither “vague”

nor “alarmist.” On the contrary, they have pled sufficiently clear harms that will be — and are

currently being — incurred. See, e.g., ECF No. 21 at 9 (Declaration of Texas Bankers Association)

(“TBA members have begun . . . building out new information technology capabilities in order

to geocode their deposits and track new metrics adopted by the [Rules].”); id. at 22 (Declaration

of American Bankers Association) (“Intermediate and Large banks must begin implementation

immediately due to the complexity and extensive change-management processes . . . required[.]”).

Nor is there any force to the objection that “no declarant specifies a single RLAA that

any of Plaintiffs’ member banks anticipate it will need to delineate.” ECF No. 67 at 47.

That is because a core difficulty here — as pled by Plaintiffs — is determining where RLAAs will

be and how to manage them in accordance with the Final Rules. See ECF No. 21 at 22 (Declaration

of American Bankers Association) (“Banks must take steps now to determine whether they will

have Retail Lending Assessment Areas” or “Outside Lending Assessment Areas,” and “then

calculate whether their CRA performance will be adequate under the [Rules’] performance

metrics.”). Same too with Defendants’ objection that Plaintiffs’ “conclusory statements that a large

bank will need to ‘build out new CRA infrastructure’ . . . contradict the text of the Final Rule.”
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ECF No. 67 at 46–47. That is because “what the Rule requires by its text” may differ from “what

the Rule requires in effect.” Plaintiffs best understand their businesses and unique operational

needs and are therefore best-situated to determine what feasible compliance will require.

IV. Plaintiffs demonstrate that the balance of equities and the public interest
support injunctive relief.

The final two elements necessary to support a grant of injunctive relief — the balance of

equities (the difference in harm to the respective parties) and the public interest — “merge” when

the government is a party. VanDerStok v. BlackHawk Mfg. Grp. Inc., 639 F. Supp. 3d 722, 730

(N.D. Tex. 2022) (citing Nken, 556 U.S. at 435). In this assessment, the Court weighs “the

competing claims of injury and . . . consider[s] the effect on each party of the granting or

withholding of the requested relief,” while also considering the public consequences of granting

injunctive relief. VanDerStok, 639 F. Supp. 3d at 730 (citing Winter v. Natural Resources Defense

Council, Inc., 555 U.S. 7, 24 (2008)).

Here, Plaintiffs note that the CRA is working well: “Over 98% of banks achieved an

Outstanding or Satisfactory rating in their most recent assessment and there is no evidence that a

few months’ delay will have a material impact of any kind.” ECF No. 20 at 26. And they point out

that FBAs make “no finding — and present no evidence — that the Final Rules will result in a

single additional CRA loan, much less enough additional CRA lending to offset the Final Rules’

substantial compliance costs.” Id. at 27. On the contrary, Plaintiffs’ evidence suggests just the

opposite: “When asked ‘the CRA was revised to create Retail Lending Assessment Areas for large

banks. Do you think your bank will reduce lending in those areas to avoid triggering an RLAA.’

28.2% of respondents replied they will reduce lending[.]” ECF No. 21 at 44 (Declaration of

Independent Community Bankers of America) (emphasis added).

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Defendants respond that [t]he balance of equities and the public interest . . . weigh against

enjoining the entire rule because many aspects of the Final Rule are indisputably beneficial.”

ECF No. 67 at 48. And they offer three reasons in support: (1) “the balance of harms with respect

to the component of the Retail Services and Products Test focused on deposits tips against

Plaintiffs because any claimed harm is illusory;” (2) “while the provisions Plaintiffs cite in support

of their Motion apply almost exclusively to large banks, the Rule provides significant regulatory

relief and lower compliance costs by increasing the asset-size thresholds that determine which

performance tests apply to an institution;” and (3) “Plaintiffs’ request to enjoin the entire Rule

would unnecessarily delay other . . . reforms that Plaintiffs do not challenge, and which have been

widely supported by members of the industry, including large institutions.” Id. at 48–50. In sum,

“the significant positive benefits of the Final Rule” weigh against the requested relief.

Id. at 50 (emphasis added).

But Defendants’ handful of pled benefits do not override Plaintiffs’ strong warrant for a

preliminary injunction. See Ala. Ass’n of Realtors v. Dep’t of Health & Hum. Servs., 141 S. Ct.

2485, 2490 (2021) (“[O]ur system does not permit agencies to act unlawfully even in pursuit of

desirable ends.”). First, the Court has already addressed whether Plaintiffs’ harms are “illusory.”

See supra Part III. They are not. And the Texas Bankers Association affirmed in its declaration

“that it has 20 members with assets over $10 billion and that other banks will inevitably be harmed

by [the Retail Service and Products Test] provisions”— rendering Defendants’ objection

untenable. ECF No. 73 at 28 n.18; see also ECF No. 21 at 8 (“TBA has 56 members that are ‘large

banks’ with assets of at least $2 billion; of these, 20 have assets over $10 billion.”).

Second, Defendants offer no persuasive support for their claim that “the Final Rule

provides significant regulatory relief and lower . . . costs.” ECF No. 67 at 48. Nor could they,
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as the 649 triple-column pages comprising the Final Rules offer none either. And even if they had,

Defendants offer no quantification as to how those benefits compare to Plaintiffs’ harms. Such a

showing is insufficient in light of Plaintiffs’ pleadings. Furthermore, Defendants’ third objection — that

Plaintiffs’ sought relief would unnecessarily delay other reforms — fails for similar reasons as their

first two. Id. at 49. As Plaintiffs note, “if delaying possibly salutary provisions were sufficient

reason to deny injunctive relief, few claims would ever warrant” such relief. ECF No. 73 at 28.

In any event, as noted above, this Court found that Plaintiffs satisfied factors one and two

with ease: (1) a substantial likelihood of success on the merits; and (2) a threat of irreparable injury.

See supra Part I–II. And “there is generally no public interest in the perpetuation of unlawful

agency action[.]” R.J. Reynolds Vapor Co. v. Food & Drug Admin., 65 F.4th 182, 195 (5th Cir.

2023). “To the contrary, there is a substantial public interest ‘in having governmental agencies

abide by the federal laws that govern their existence and operations.’” Texas v. United States, 40

F.4th 205, 229 (5th Cir. 2022) (quoting Washington v. Reno, 35 F.3d 1093, 1103 (6th Cir. 1994)).

CONCLUSION

For the foregoing reasons, the Court GRANTS Plaintiffs’ Motion. Defendants are hereby

ENJOINED from enforcing the regulations published at 89 Fed. Reg. 6574 (Feb. 1, 2024)

(to be codified at 12 C.F.R. Sections 25, 228, and 345) against Plaintiffs pending the resolution of this

lawsuit. The effective date of April 1, 2024, along with all other implementation dates, are hereby

EXTENDED, day for day, for each day this injunction remains in place.

SO ORDERED.

March 29, 2024

________________________________
MATTHEW J. KACSMARYK
UNITED STATES DISTRICT JUDGE

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