On December 19, President Biden vetoed the joint resolution (S. J. Res. 32) the US Senate and House of Representatives passed under the Congressional Review Act that would have repealed the CFPB’s small business data collection rule (Rule) known as “Small Business Lending Under the Equal Credit Opportunity Act (Regulation B)” (we blogged about the rule and congressional challenge here and here).
The Rule, under Section 1071 of the Dodd-Frank Act, requires small business owners to provide demographic data (i.e., race, gender, ethnicity, etc.), as well as geographic information, lending decisions, and credit pricing to lenders. According to President Biden’s statement accompanying the veto, the Rule brings “much needed transparency to small business lending” while the Joint Resolution and repealing this rule would “would hinder the Government’s ability to conduct oversight of abusive and predatory lenders.” The bill is now to be returned to the Senate to be voted on again unless the US Senate and House of Representative override President Biden's veto, the rule will survive the Congressional Review Act challenge.
Putting It Into Practice: While the Rule survived this latest challenge, other challenges to the Rule remain as US district courts in Texas Bankers Association v. CFPB and in The Monticello Banking Company v. CFPB issued injunctions against enforcement of the Final Rule to cover all small business lenders nationwide (we blogged about these cases here and here). Both injunctions will dissolve if the U.S. Supreme Court reverses the Fifth Circuit in Community Financial Services Association v CFPB, which found the CFPB’s funding structure unconstitutional. The Supreme Court is expected to decide the CFSA case by the summer of 2024.