WASHINGTON, D.C. – The U.S. House today passed a resolution, S.J.Res. 32, under the Congressional Review Act (CRA) to repeal the Consumer Financial Protection Bureau’s (CFPB) Section 1071 rule of the Dodd-Frank Act, which requires financial institutions to collect and report data on credit applications to the Bureau and the public.
President Biden has indicated that he would veto the CRA bill if sent to him for signature. S.J.Res. 32 passed the U.S. Senate in October.
Mitria Spotser, vice president and federal policy director at the Center for Responsible Lending (CRL) made the following statement:
We strongly oppose the CRA bill and thank the White House for recognizing the importance of the 1071 small business resolution and its willingness to override the harmful CRA bill. A robust 1071 rule will support the small businesses that power our nation’s economy, spur entrepreneurship and create economic opportunity for millions of Americans in communities that have historically lacked sufficient access to capital.”
A recent poll sponsored by CRL and Americans for Financial Reform (AFR), shows that 73% of voters across political parties overwhelmingly support Section 1071 to track inequalities in access to credit for women, Black, Latino, Asian and rural business owners while 18% of voters oppose it.
Section 1071 was authorized years ago as part of the 2010 Dodd-Frank Act. Congress established it as a result of the Great Recession to help government agencies, including the Small Business Administration (SBA), as well as state and local governments monitor the small business lending market and ensure that lenders do not violate anti-discrimination laws. The rule also enables regulators and lenders to modernize existing lending programs to better meet the credit needs of historically underserved businesses. However, it wasn’t until March 2023 that the CFPB issued a final rule to implement Section 1071.
The CRA bill has been opposed by nearly 100 national and state organizations representing small business, agriculture, rural, lender, civil rights and consumer advocate groups, including Americans for Financial Reform Education Fund, California Reinvestment Coalition, Leadership Conference on Civil and Human Rights (LCCR), Hispanic Federation, National CAPACD, National Urban League, NAACP, National Community Reinvestment Coalition (NCRC), National Consumer Law Center (on behalf of its low-income clients), Unidos US, National Urban League, United States Hispanic Chamber of Commerce, among others.
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