Sen. John Kennedy (R-La.) sponsored a resolution of disapproval in the Senate opposing the Consumer Financial Protection Bureau’s (CFPB) rulemaking on Section 1071 of the Dodd-Frank Act.
The 1071 rule created a requirement for lenders – including banks, credit unions, and other non-bank lenders – to collect and report certain data on small-business applications for credit.
“By collecting and publishing personal demographic and other information, the CFPB is putting small-business owners at risk of having their private financial affairs exposed to a watching world. Reporting these personal details is an invasion of privacy and a waste of resources aimed at furthering the woke agenda. The practical impact of this rule could hamstring lending to Main Street,” Kennedy said.
Rep. Roger Williams (R-Texas) introduced a similar resolution in the House of Representatives.
“The Consumer Financial Protection Bureau’s (CFPB) new rule is a continued attack on Main Street America. Each day, small businesses struggle with rising costs, increasing interest rates, and ongoing labor shortages, and this new rule only builds on those issues. We cannot allow the CFPB to continue to add burdensome requirements without any consideration of their impact on small businesses and lenders. I am proud to stand by my commitment to protect Main Street America from costly over-regulation by unelected bureaucrats,” said Williams.
The Credit Union National Association (CUNA) sent a letter of support to Kennedy in favor of this resolution.
“Credit unions support the goals of section 1071 and seek to provide all members with fair and equitable financial opportunities. That said, it remains important for the CFPB to not harm small businesses or small financial institutions, such as community credit unions, in the process,” the letter reads.
CUNA noted the “overly broad” scope of the final rule will “substantially” raise the cost of small-business borrowing.
“Section 1071 should be appropriately tailored to ensure the health and financial needs of truly small businesses can continue to be met,” the letter reads. “Furthermore, the tiered compliance schedule established by CFPB is aggressive even for the largest, most technologically savvy commercial lenders.
“We support efforts to establish an appropriate compliance timeline for Section 1071 so that credit unions and their vendors have sufficient time to effectively implement these complex changes,” it adds. “CUNA fully supports your efforts to rein in the CFPB and its imposition of this burdensome regulation on credit unions and other community financial institutions.”