Senate votes to nullify CFPB’s small-business data collection rule | American Banker

WASHINGTON — The full Senate voted 53-44 in favor of a resolution to repeal the CFPB’s small-business data collection rule, sending the Congressional Review Act resolution to the House. 

The votes against the resolution, originally introduced by Sen. John Kennedy, R-La., in June, were primarily from Republicans. But three Democrats — Jon Tester of Montana, John Hickenlooper of Colorado and Joe Manchin of West Virginia — also voted in favor of the resolution. Independent Senators Kyrsten Sinema of Arizona and Angus King of Maine — both of whom caucus with Democrats — also supported the resolution. 

Kennedy, on the Senate floor on Wednesday, said that the CFPB’s 1071 is too wide in its scope of who would be required to provide information from small-business owners and in what banks would need to ask. 

“Well, the CFPB has taken our work and totally perverted it,” he said. “The CFPB has propagated a rule that totally perverts our intention of section 1071 of the Dodd Frank Act.” 

Of those lawmakers, Tester and Sinema were the only members of the Senate Banking Committee to break ranks. Sinema, however, is leaving the committee for a seat on Appropriations, and will be replaced by the newly appointed Sen. Laphonza Butler, D-Calif., on the banking committee, according to Senate leadership. 

Sen. Sherrod Brown, D-Ohio, urged Democratic lawmakers to vote against the resolution on the Senate floor. 

“You don’t need reports and studies to know that most Ohioans don’t get a fair shake from big banks and the financial system,” he said. “But you do need accurate information to fight back. That’s why, in 2010, Congress required the CFPB to get that information, and this spring, the CFPB issued a rule to finally implement the law and bring transparency to the small-business lending market. We’re talking about basic data on the borrowers’ demographics, loan pricing, application approvals and other critical information — just like we do with mortgages.” 

Brown pushed back on Republican assertions that the rule could expose the private details of small-business owners, and that the requirements would be overly burdensome. 

“With this data, we’ll be able to see gaps in the small-business lending market — allowing programs to expand access to credit for small businesses, like small businesses in rural areas,” he said. “And more data means more accountability — ensuring that lenders reach minority communities and helping to root out discrimination.” 

The CRA review now moves to the House, where Rep. Roger Williams, R-Texas, has introduced a companion resolution. Lawmakers in the lower chamber have been hamstrung, however, by a drawn-out search for a permanent speaker after the ouster of Kevin McCarthy, R-Calif., on Oct. 3. Most observers don’t anticipate the House to prioritize the resolution while Republicans there sort out their leadership challenges. 

For the CRA challenge to actually nullify the CFPB’s rule, it would have to be signed by President Joe Biden. The White House has already said that Biden would oppose the resolution, should it make it to his desk. Republicans don’t currently have enough votes to overturn his veto. 

The CFPB’s small-business data collection rule has faced legal challenges as well. A federal judge has agreed to halt the Consumer Financial Protection Bureau’s small-business data collection rule until after the Supreme Court decides next year on whether the bureau’s funding is constitutional. The Texas Bankers Association and the American Bankers Association had sued the CFPB to keep the rule from going into effect.