A proposal from the Consumer Financial Protection Bureau to require small business lenders to share information about the race and demographic data took another body blow on Friday when the House of Representatives approved a resolution to repeal the rule. The Senate had already approved a similar resolution, setting up a potential veto from President Biden and a potential veto override from the House. Meanwhile, two cases against the CFPB seeking to block the rule remain stayed pending the ruling from the Supreme Court on a case challenging the constitutionality of the Bureau’s funding structure.
The Background: The House voted 221-202, largely among party lines, to invoke the Congressional Review Act to repeal the proposed rule. The resolution now moves to President Biden’s desk for his signature or veto. If he vetoes the resolution, Congress can override the veto by a two-thirds majority.
- The rule, which was finalized by the CFPB in March, mandated banks to gather data on loan applications from women-owned, minority-owned, and small businesses to help lenders identify business development needs and opportunities.
- A number of financial services organizations have sued the CFPB to block the enactment of the rule, saying that the costs of compliance were too high.
- Several Democrats in the House and Senate voted with Republicans to block the rule’s enactment.
The Last Word: “During a time where small businesses are facing crushing inflation and increasing borrowing costs, it is important that we put an end to the CFPB’s broad, burdensome, and difficult to implement rulemaking,” said Rep. Roger Williams [R-Texas], who introduced the resolution in the House of Representatives. “It is now Biden’s turn to listen to the American people and sign this bill into law instead of bowing down to out of touch unelected bureaucrats.”
Said Rep. Maxine Waters [D-Calif.]: “There’s a lot of talk in Congress about how we love small businesses, how we support small businesses. But the proof of the pudding is in the eating. Therefore, I urge Members on both sides of the aisle to actually do something to help small businesses, stop talking about your support of small businesses when you know they need access to capital that they don’t have, and so we want to do something real for small businesses.”