President Biden Vetoes Resolution to Repeal Controversial Small Business Lending Rule
The joint resolution would have nullified a new small business lending rule that critics say politicizes the lending process.
A controversial Consumer Financial Protection Bureau (CFPB) small business lending rule will remain in effect after President Joe Biden vetoed a joint resolution of disapproval that would have repealed the measure.
The Rule in Question
The rule requires lenders to annually collect and report certain credit application data from small business owners, including personal demographics such as race, sexual orientation, and gender identity. It also allows for the creation of a publicly accessible database of small business credit applications. The rule took effect in August.
Republicans have criticized the rule as a move to make the lending process more “woke.”
President Biden’s Defense
In issuing his veto, President Biden defended the rule, stating that it would increase transparency in small business lending and help lenders and organizations better meet the needs of small businesses. He argued that the resolution would hinder the government’s ability to oversee abusive and predatory lenders, make it harder for small businesses to assess lending opportunities and access capital, and impede efforts to address gaps in capital access for minority- and women-owned businesses.
President Biden emphasized the importance of supporting small businesses, stating that they are the engines of the economy and that his administration will not support policies that hinder their ability to thrive and grow.
‘None of Their Business’
Sen. John Kennedy (R-La.), the sponsor of the joint resolution, criticized the rule on the Senate floor, calling the demographic reporting requirements intrusive. He argued that it is not the bank’s business to inquire about a person’s sexual orientation or gender identity.
The National Federation of Independent Business (NFIB) has also expressed concerns about the rule, stating that it would impose a substantial burden on small banks and small businesses to collect and report the required information. The NFIB highlighted that small banks and credit unions have fewer resources dedicated to compliance and paperwork compared to larger banks.
A veto override would require a two-thirds majority vote in both chambers of Congress, which is unlikely given that the resolution passed with slim majorities in both the House and Senate.
Sources:
The Epoch Times
NFIB Survey
NFIB Letter
