The rule was enacted by the CFPB to increase transparency in small business lending and prevent unlawful discrimination.
12/27/2023 12:30 P.M.
1.5 minute read
President Joe Biden has vetoed a resolution to nullify a Consumer Financial Protection Bureau rule requiring lenders to disclose credit applications they receive from small businesses, lending decisions and demographic data.
The resolution (PDF), originally sponsored by U.S. Sen. John Kennedy, R-La., and supported by Democrat and independent senators, passed in the U.S. Senate 53-44 in October and in the U.S. House of Representatives 220-202 in November, ACA International previously reported.
Biden vetoed the resolution because it would limit the government’s ability to oversee predatory lenders, Reuters reports.
House members used the Congressional Review Act to overturn the rule. The Congressional Review Act allows Congress to reverse certain agency rules within 60 days of their release.
Court Challenges
Meanwhile, two district court cases put enforcing the rule on hold.
In Texas, an injunction granted in August means banks do not have to comply with the rule until the U.S. Supreme Court issues its decision in Consumer Financial Protection Bureau v. Community Financial Services Association of America, Limited (CFSA), a case challenging the constitutionality of the bureau’s funding structure that originated in the 5th Circuit, ACA previously reported.
In September, a U.S. district judge serving in the Eastern District of Kentucky granted a plaintiff’s motion for a preliminary injunction (PDF), effectively putting a halt on the enforcement of the rule, ACA previously reported.
Related Content from ACA International
Congress Responds to CFPB Small Business Lending Data Collection Rule
Senate Overturns CFPB Small Business Lending Report Rule
House Votes to Overturn CFPB Small Business Lending Rule
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