The Senate on Wednesday voted 53-44 to overturn a Consumer Financial Protection Bureau rule that requires financial institutions to provide personal information about small business borrowers, including their race and gender.
Senate Minority Leader Mitch McConnell (R-Ky.) said the resolution introduced by Sen. John Kennedy (R-Louisiana) under the Congressional Review Act would be a blow to President Joe Biden's regulatory authority. He emphasized that it is something to give. A resolution under the CRA requires only a simple majority of the Senate.
“Today, the Senate will vote on a Republican resolution designed to chip away at yet another example of the Biden administration's runaway regulatory state,” McConnell said on the floor before the vote. “Washington Democrats want to tie small business lending to diversity quotas.”
House Small Business Committee Chairman Roger Williams (R-Texas) introduced a companion resolution in the House. The House Financial Services Committee introduced the resolution in July, but it has not been taken up on the floor.
CFPB rules finalized in April require financial institutions to report information on minority- and women-owned businesses and small businesses applying for loans to help enforce fair lending rules. It becomes. Congress mandated this rule in the Financial Regulatory Reform Act of 2010.
Democratic Sens. Joe Manchin III of West Virginia, John Hickenlooper of Colorado, and Jon Tester of Montana also joined Republicans in voting to overturn the rule. Independent Sens. Kyrsten Sinema of Arizona and Angus King of Maine, who caucus with Democrats, also voted to overturn the bill. Mr. Manchin, Mr. Tester, Mr. Sinema and Mr. King are seeking re-election in 2024, but none have announced whether they will seek re-election.
Senate Banking Committee Chairman Sherrod Brown (D-Ohio) took to the floor to defend the CFPB rule ahead of the vote, saying the rule would increase transparency in the small business lending market and provide benefits that the financial industry has traditionally overlooked. It will level the playing field for entrepreneurs.
“Lending to small businesses takes place in the shadows. There is no good data on how lenders are serving small businesses in the region. Whose lenders could be left behind?” We don't have good data on that,” Brown said. “The data we have suggests that too many small business owners are not getting their fair share of financing for their businesses.”
The resolution is likely to have strong support in the Republican-controlled House, but without a speaker, it is unclear when Congress will take up the resolution. If Biden vetoes the resolution, a two-thirds majority in each chamber would be required to override it.