The Senate voted not to override President Joe Biden’s veto
of a joint resolution to overturn the Consumer Financial Protection Bureau’s
(CFPB) final rule on small business lending, which the bureau is mandated to
issue under Sec. 1071 of the Dodd-Frank Act. The rule stipulates data
collection and reporting requirements for financial institutions originating
100 or more small business loans per year.
Resolutions to nullify the rule via the Congressional Review
Act passed in the House and Senate last year, with unanimous support from
Republicans but few Democrats. Biden’s decision was not a surprise because the president
said he would veto the measure before it reached his desk in December.
Two-thirds of lawmakers would have needed to support overriding
Biden’s veto, but the motion failed by a vote of 54-45.
Numerous financial trade organizations voiced opposition to
the rule, citing the significant amount of data points lenders would be
required to collect from loan applicants. In November, the American Bankers
Association (ABA) wrote to the bureau noting its concern that the rule’s
collection requirements would make compliance significantly burdensome on
banks, particularly community banks.
The trade group also expressed its displeasure with Biden’s
veto on social media.
“We are disappointed that [President Biden] chose to ignore
the strong, bipartisan majority in Congress that voted to overturn the CFPB’s
harmful small business lending reporting requirements,” ABA wrote in a post on
X. “An override of his veto would be a vote for small businesses and the
lenders that support them.”
The rule also was the subject of a lawsuit filed by the
Texas Bankers Association last year. In July, a Texas judge issued a
preliminary injunction against enforcement of the rule until the U.S. Supreme
Court issues a decision in a separate case concerning the constitutionality of
the CFPB’s funding structure, which is not set to happen until April.