On October 18, the U.S. Senate cast a vote of 53-44 in favor of S.J. Res. 32, a resolution triggered by Sen. Kennedy of Louisiana that seeks to repeal the implementation of the Consumer Financial Protection Bureau’s (CFPB) final ruling under Section 1071 of the Dodd-Frank Act. This particular rule mandates lenders to disclose demographic data concerning small-business loan beneficiaries. Details about the resolution can be found on JD Supra.
To invalidate the CFPB’s ultimate rule, the resolution put into action the Congressional Review Act (CRA). This piece of legislation gives lawmakers the authority to rescind a recently dispensed federal agency rulemaking by sanctioning a resolution of disapproval. The repeal, if ultimately successful, could lead to significant changes in regulatory frameworks governing small business lending and calls into question future regulations that may be subject to Congressional Review.
This resolution is timely given the increasing scrutiny of lenders and their practices, and the ongoing debate about the best ways to ensure fair access to credit for small businesses. While some see the reporting requirements as an unnecessary burden for lenders, others note the benefits of having more data on small-business lending, which can help identify patterns and trends that could inform better policy-making.
Regardless of the ultimate outcome, it’s clear that this repeal resolution will have significant implications for both lenders and small businesses alike, and will likely be a topic of ongoing debate in the legal and business communities.