Senate Votes for Resolution to Repeal CFPB’s Small-Business Data Collection Rule; League Noted Issues with Scope, Potential Burden of Rule

The U.S. Senate on Wednesday voted 53-to-44 in favor of a resolution to repeal the CFPB's small-business data collection rule. The Congressional Review Act resolution is now on its way to the House.

The rulemaking was required by the 2010 Dodd-Frank Act, but the final rule wasn’t released until March of this year.

While your League recognizes that this rule was mandated by Congress, we urged the CFPB as it crafted the final rule to carefully consider how the scope of its rule might impact the cost of small business borrowing and how burdensome data collection required by the rule would affect smaller financial institutions, like credit unions. We also noted the potential privacy concerns related to the public release of this data.

“We support the CFPB fulfilling its statutory mandate in issuing this rule, but we believe the rule needs to be the least possible burden to credit unions. Our concerns about the final rule remain unchanged: the scope of the rule and the regulatory burden it represents might well disincentivize some credit unions from offering small business lending, depriving small businesses of an important source of credit for fueling growth and creating jobs," notes Virginia Credit Union League President/CEO Carrie Hunt. "Credit unions have a strong history of small business lending and have demonstrated that with existing reporting and data."

The CFPB's small-business data collection rule has also faced legal challenges. A federal judge has agreed to halt the Consumer Financial Protection Bureau's small-business data collection rule until after the Supreme Court decides next year on whether the bureau's funding is constitutional. The Texas Bankers Association and the American Bankers Association had sued the CFPB to keep the rule from going into effect. Credit unions and CU trade associations recently got involved in the case, asking for parity under the injunction to halt the Section 1071 Rule. A federal court in Kentucky delayed enforcement of the CFPB’s small business lending data reporting rule until the Supreme Court rules on the constitutionality of the bureau’s funding structure.