ABA supports resolution to overturn CFPB data collection rule

In a letter to Senate leaders today, the American Bankers Association expressed support for a proposed resolution of disapproval seeking to overturn the Consumer Financial Protection Bureau’s final rule implementing Section 1071 of the Dodd-Frank Act. S.J. Res. 32 by Sen. John Kennedy (R-La.) currently has 39 co-sponsors and would overturn the CFPB rule if adopted by both houses of Congress and signed by the president. An identical resolution has been introduced in the House.

ABA said that banks support complying with the nation’s fair lending laws, but the enormity of data points to be collected under the rule and the 100-loan threshold for determining which lenders must report would place a significant burden on banks, especially community banks. The definition of “small business” as any business with annual revenues of $5 million or less expands the scope of the rule beyond what Congress intended, the association added. Also, the CFPB’s publication of the data collected will create privacy concerns, and banks will be regularly examined for compliance and data accuracy while nonbanks will not.

“We are concerned that the costs associated with collecting the data and the anticipated reliance on statistical manipulation in fair lending supervision and enforcement will discourage bank lending to small businesses, particularly by community and midsize banks, and we strongly urge Congress to advance S.J. Res. 32 as soon as possible,” ABA said.