Newsroom
House passes resolution to block 1071 rule
The House Friday passed a Congressional Review Act (CRA) resolution with bipartisan support to block the CFPB’s rule that would require credit unions and banks to collect demographic data on small businesses that apply for loans, implementing Section 1071 of the Dodd-Frank Act.
CUNA President and CEO Jim Nussle and NAFCU President and CEO Dan Berger wrote to House leadership ahead of the vote, urging the chamber to pass a joint resolution; the Senate in October passed the resolution.
“It is important for the CFPB to not harm small businesses or small financial institutions, such as community credit unions,” wrote Nussle and Berger. “There is widespread concern that the complexity and significant costs of the CFPB’s Section 1071 rule will weigh disproportionately on credit unions in ways that ultimately lead to fewer and less favorable outcomes for all small business borrowers.
“The overly broad scope of the CFPB’s rule will substantially raise the cost of small business borrowing and require covered financial institutions to collect data on businesses that are not ‘small businesses’ by any traditional metric. Rulemaking from Section 1071 should be appropriately tailored to ensure the health and financial needs of truly small businesses can continue to be met,” they added.
The CRA now goes to President Joe Biden. The White House had previously threatened a veto of the measure and the expectation is that the president will carry through with that threat. Neither chamber had the two-thirds margin to override a veto in their initial votes on the measure.
CUNA and NAFCU will continue to engage the bureau and lawmakers on the issue to obtain regulatory relief for credit unions.