On October 18, the Senate voted 53-44 to approve S.J. Res. 32, a resolution sponsored by Sen. Kennedy (R-LA) to overturn the implementation of the CFPB’s final rule under Section 1071 of the Dodd-Frank Act requiring lenders to report demographic data on small-business loan recipients (see our previous blogs on the rule here and here). The resolution invoked the Congressional Review Act (CRA) to disapprove the CFPB’s final rule – the CRA allows lawmakers to revoke a recently issued federal agency rulemaking by passing a resolution of disapproval against it. The resolutions must pass each chamber of Congress and need a presidential signature to take effect. The White House has threatened to veto the bill.
Putting It Into Practice: While the resolution is likely to pass in Congress, it is less likely that a joint resolution would be signed into law by President Biden, meaning that the final rule will proceed toward implementation. Nonetheless, the latest resolution highlights the financial services industry’s worries, which have been acknowledged across party lines, about the compliance burden of adding additional data points to the collection and reporting requirements and publishing the results in a way that could lead to privacy risks for small business owners.