Lexology, September 23, 2023, Congressional Republicans Receive Banking And Credit Union Trade Association Support For Legislation To Overturn The CFPB’s Section 1071 Final Rule
This summer, Representative Roger Williams (R-Texas) and Senator John Kennedy (R-La.) introduced identical Congressional Review Act (CRA) resolutions in the U.S. House and Senate (H.J. Res. 66 and S. J. Res. 32, respectively) disapproving the Consumer Financial Protection Bureau’s (CFPB or Bureau) implementation of the small business data collection and reporting final rule under § 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Final Rule). Currently, the Senate resolution has not moved beyond introduction, but the House Financial Services Committee recently approved the House resolution to advance. If the resolutions are adopted by both houses of Congress and signed by the President, the Final Rule would be overturned. While that outcome appears unlikely under the current Democratic administration, letters submitted to Congress by banking and credit union trade groups supporting the joint resolution do appear to confirm the nearly unanimous industry opposition to the Final Rule.
Conversely, consumer advocacy groups have written to members of Congress rejecting the joint resolutions and arguing to retain the Final Rule. In a July 25 letter to both houses of Congress, the National Community Reinvestment Coalition (NCRC) on behalf of itself and 150 other organizations touted the potential benefits of the Final Rule. “By increasing transparency of pricing, terms and conditions, and action taken on applications, 1071 data is likely to curb excessive pricing, reduce abusive terms, and increase access to credit for traditionally underserved small businesses. Lenders will also realize benefits in terms of improved ability to gauge their competitive position in the market and opportunities for them to identify untapped market segments and serve new customers.”
