The Senate voted not to override President Joe Biden’s veto of a joint resolution to overturn the Consumer Financial Protection Bureau’s (CFPB) final rule on small business lending, which the bureau is mandated to issue under Sec. 1071 of the Dodd-Frank Act. The rule stipulates data collection and reporting requirements for financial institutions originating 100 or more small business loans per year.
Resolutions to nullify the rule via the Congressional Review Act passed in the House and Senate last year, with unanimous support from Republicans but few Democrats. Biden’s decision was not a surprise because the president said he would veto the measure before it reached his desk in December.
Two-thirds of lawmakers would have needed to support overriding Biden’s veto, but the motion failed by a vote of 54-45.
Numerous financial trade organizations voiced opposition to the rule, citing the significant amount of data points lenders would be required to collect from loan applicants. In November, the American Bankers Association (ABA) wrote to the bureau noting its concern that the rule’s collection requirements would make compliance significantly burdensome on banks, particularly community banks.
The trade group also expressed its displeasure with Biden’s veto on social media.
“We are disappointed that [President Biden] chose to ignore the strong, bipartisan majority in Congress that voted to overturn the CFPB’s harmful small business lending reporting requirements,” ABA wrote in a post on X. “An override of his veto would be a vote for small businesses and the lenders that support them.”
The rule also was the subject of a lawsuit filed by the Texas Bankers Association last year. In July, a Texas judge issued a preliminary injunction against enforcement of the rule until the U.S. Supreme Court issues a decision in a separate case concerning the constitutionality of the CFPB’s funding structure, which is not set to happen until April.