The Senate has passed Sen. John Kennedy’s (R-La.) Congressional Review Act resolution to stop the Biden administration’s Consumer Financial Protection Bureau from enforcing its Dodd Frank Section 1071 small-business data collection rule. The resolution of disapproval now moves to the House of Representatives for consideration. 

“Small-business owners are already suffering too much under Biden’s inflation, and the CFPB’s rule only further burdens them and puts their personal data at risk. The House should move quickly to pass this resolution so that lenders can continue to support small businesses and avoid unnecessary compliance costs,” said Kennedy.

Section 1071 requires covered financial institutions to collect and report certain personal information on small business loan applicants and report that to the CFPB. This information includes an applicant’s race, ethnicity and sex and whether the business is minority-owned, woman-owned or LGBT-owned. The CFPB may then make certain parts of that information public, including data that could publicly identify the small business credit applicant.

In August, a letter to CFPB Director Rohit Chopra urged the bureau to pause its 1071 data collection rule while the courts determine the validity of the Section 1071 rule.

Background:

• Kennedy introduced a Congressional Review Act resolution of disapproval of the CFPB rule to implement Dodd Frank Section 1071, which amends the Equal Credit Opportunity Act.

• Kennedy introduced the Transparency in CFPB Cost-Benefit Analysis Act to ensure that the CFPB does not establish regulations that would foist unreasonable costs or harms onto taxpayers, financial entities or consumers. 

• Kennedy introduced the Small LENDER Act to protect Louisiana’s small businesses’ access to capital. The legislation would block the Biden administration’s CFPB from requiring community banks and lenders to collect and report social data—such as race, gender and ethnicity—from borrowers.