Banks unilaterally reopening a consumer’s deposit account to process transactions could be in violation of the Consumer Financial Protection Act, the CFPB has warned.

The proposed rule would require assessments of borrowers’ ability to repay and apply the Truth in Lending Act’s civil liability provision for violations.

Banking trade groups panned the rule as unnecessary and damaging to credit card issuers, especially smaller banks and credit unions. Michigan Democrat Rep. Rashida Tlaib has expressed “strong support” for the proposed rule.

The policy statement outlining prohibition on abusive acts and practices subjectively expands the bureau’s authority and could impact conduct permitted by safe harbors in federal consumer protection laws, according to industry attorneys.

Rep. Patrick McHenry, R-NC, has threatened to use the Congressional Review Act to prevent implementation of the CFPB’s new reporting requirements on small business lending.

The Equal Credit Opportunity Act includes an affirmative obligation to continually search for whether any adverse impacts from a model can be mitigated by a less discriminatory alternative.

The proposal is an attempt by the CFPB to circumvent the limits of its authority with respect to arbitration agreements, said trade groups.

CFPB Director Rohit Chopra said a push in 2018 to reduce regulations on banks contributed to the collapse of Silicon Valley Bank.

The CFPB released a final rule implementing Dodd-Frank Act Section 1071, which requires financial institutions to collect and report data on their small business lending activities.

The Second Circuit Court of Appeals’ ruling last month deepens a circuit split on the constitutionality of the CFPB’s funding structure, which is set for hearing before the Supreme Court next term.