Lafayette Reporter

President Joe Biden has vetoed Senator John Kennedy's Congressional Review Act (CRA) resolution, which aimed to reverse the Consumer Financial Protection Bureau's (CFPB) rule on small business data collection. The resolution intended to prohibit the enforcement of the Dodd Frank Section 1071 rule, requiring financial institutions to collect and report personal information on small business loan applicants.

Kennedy expressed disappointment at Biden's veto, stating, "I'm very disappointed that President Biden chose to veto this simple resolution that could have protected the private information of small business owners from this invasive woke CFPB rule."

The Senate passed Kennedy's resolution in October, and the House of Representatives followed suit in December, sending it to the president's desk. However, Biden's veto effectively maintains the CFPB's authority to enforce the data collection rule.

Section 1071 of the Dodd-Frank Act mandates that covered financial institutions collect and report specific personal information, including race, ethnicity, sex, and ownership details, such as whether the business is minority-owned, woman-owned, or LGBT-owned. Some of this information may be made public by the CFPB, potentially compromising the privacy of small business credit applicants.

Kennedy had previously urged the CFPB to halt the implementation of the data collection rule until its validity was determined by the courts. The senator raised concerns about the agency's ability to store and protect personal information, citing a recent data breach that exposed the personally identifiable information of 256,000 consumers.

Critics of the rule argue that it may have negative consequences for small businesses, including increased compliance costs for lenders, potentially reducing the availability and accessibility of small business credit.

The CFPB finalized the rule on March 30, 2023, and financial institutions will now be required to collect additional information about loan applicants, such as census tract, North American Industry Classification System code, and years in business. The rule applies to financial institutions that have originated at least 100 small business loans in each of the two preceding calendar years, with a small business defined as a company with $5 million or less in revenue from the previous fiscal year.

While Kennedy's resolution sought to reverse the CFPB rule, Biden's veto ensures that the data collection requirements will remain in effect, potentially impacting small business owners seeking credit.

The full text of Kennedy's resolution can be found [here](link to resolution text), and video footage of Kennedy's comments during the resolution's passage in the Senate can be viewed [here](link to video).

To find out more, go to this link: https://www.kennedy.senate.gov/public/press-releases?ID=F96977A5-6CD1-43BF-8C3D-C7E94E996894