House approves resolution to overturn CFPB’s 1071 rule

The House today voted 221-202 to pass a Senate joint resolution to overturn the CFPB’s final rule implementing Section 1071 of the Dodd-Frank Act, which requires the collection and reporting of credit application data for small businesses. S.J. Res. 32 had previously cleared the Senate with bipartisan support, and it cleared the House with most Republicans and six Democrats voting in favor of the resolution. S.J. Res. 32 would need to be approved by both houses of Congress and signed by the president to overturn the rule. The White House has stated that President Biden intends to veto the legislation.

In a statement, American Bankers Association President and CEO Rob Nichols said that Biden should recognize that Congress has spoken and rejected the CFPB’s flawed rule, “given the harm it would cause small businesses across the country and the banks that support them.”

“To be clear, America’s banks firmly support the goals of Section 1071 and the enforcement of the nation’s fair lending laws, but as we have said before, the rule as written is too far-reaching,” Nichols said. “It will harm the relationship banking model Director [Rohit] Chopra often praises and actually discourage bank lending to small businesses given the cost to collect this data. No one should want that outcome. We are also concerned that the publication of this data will put small businesses’ privacy at risk. Now is the time for the CFPB to work with all stakeholders to revise this rule in a way that actually incentivizes bank lending to all small businesses.”