Recently, the U.S. Senate passed a joint resolution of disapproval (S.J. Res. 32) under the Congressional Review Act to nullify the CFPB’s small business lending rule. As previously covered on InfoBytes, the rule, which requires financial institutions to collect and report to the CFPB credit application data for small businesses, has faced opposition from various politicians and is the subject of litigation brought by financial institutions that would be subject to the rule in the U.S. District Court of the Southern District of Texas. In support of the joint resolution, Sen. John Kennedy (R-LA), who introduced the legislation, recently argued on the floor that “the CFPB is setting these small business people… up for lawsuits” because “[it] has promulgated a rule that totally perverts our intention in section 1071.”  If the House of Representatives similarly passes the joint resolution, and President Biden signs it, the CFPB’s rule will be nullified under the Congressional Review Act.

The joint resolution follows the order from the U.S. District Court for the Southern District of Texas granting a nationwide preliminary injunction enjoining the CFPB from enforcing the rule (covered by InfoBytes here and here).