(UnitedHeadlines.com) – A joint resolution of disapproval about the new Consumer Financial Protection Bureau (CFPB) lending rule for small businesses was vetoed Dec. 19 by President Joe Biden.
The controversial rule, which went into effect in August, requires lenders to annually collect and report to the CFPB the credit application data of the small-business owners they lend to, such as gender identity and race. The rule allows for the creation of a publicly accessible database of small-business credit applications.
Republicans stated that the rule makes the lending process more “woke.” The sponsor of the joint resolution, Louisiana Sen. John Kennedy, called the new requirement to report demographics intrusive. When Kennedy introduced the resolution Oct. 18, he stated, “It is none of their business” what adult Americans do “in the privacy of their bedroom.”
The National Federation of Independent Business is concerned the new rule would impose a substantial burden on small businesses and small businesses to report and collect the information. In an Oct. 18 letter to the Senate, the organization said that rule could affect small banks and “the access to credit of their small business customers.”
In issuing the veto, Biden stated that the rule means there would be an increase in the transparency in small-business lending, leading lenders to meet the needs of small businesses. He added that the resolution would have made it more difficult for the “acute gaps in capital access for minority- and women-owned businesses” to be addressed.
The resolution passed in the Senate in October with five Democrats voting in favor of the resolution. It passed in the Republican-controlled House in early December. An override of Biden’s veto requires two-thirds majority votes in the House and Senate.
Although Biden vetoed the resolution, the rule is still facing legal challenges. A federal court ruled in July that until a related pending case is resolved, the CFPB cannot implement the new rule.
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