Dodd-Frank Update
Republicans seek to repeal CFPB 1071 rule with legislation
Consumer Protection, Inside the Beltway
Tuesday, February 18, 2025
Congressional Republicans expressed support for legislation to repeal the Consumer Financial Protection Bureau’s (CFPB) small-business lending rule implementing Sec. 1071 of the Dodd-Frank Act. The action came shortly after the Fifth Circuit Court of Appeals decided to stay compliance deadlines associated with the rule’s expanded data collection requirements for lenders.
The bill, introduced by Sen. John Kennedy (R-La.), represents his second attempt to overturn the rule which amends the Equal Credit Opportunity Act (ECOA) to require financial institutions to collect and report demographic information about small-business owners applying for funding, as well as whether the business is minority-owned, women-owned or LGBT-owned.
In 2023, Kennedy and Rep. Roger Williams (R-Texas) introduced a joint resolution of disapproval, seeking to nullify the rule by invoking the Congressional Review Act. Congress passed the resolution only to have it vetoed by former President Joe Biden.
“President Biden’s woke CFPB put small-business owners’ information at risk by requiring their personal details to be exposed online,” Kennedy said in a statement. “My bill would repeal the last administration’s misguided regulation so that job creators’ private information isn’t public, and government doesn’t stand in the way of Main Street’s access to loans.”
Republicans have cited concerns about the implications of the rule, arguing the increased compliance costs associated with its implementation may reduce the availability and accessibility of small-business credit.
CFPB being tasked with collecting and storing the types of personal information required under the rule, citing the data breach against the bureau, reported in April 2023, which exposed personally identifiable information belonging to approximately 256,000 consumers. The CFPB then failed to properly inform them for two months.
The Senate version of the bill has been cosponsored by Sens. Cindy Hyde-Smith (R-Miss.), Joni Ernst (R-Iowa), John Boozman (R-Ark.), Roger Wicker (R-Miss.), John Barrasso (R-Wyo.), Mike Rounds (R-S.D.), Steve Daines (R-Mont.) and Ted Cruz (R-Texas).
Williams introduced a companion bill in the House, cosponsored by Rep. Daniel Meuser (R-Pa.), Rep. Ann Wagner (R-Mo.), Rep. Bill Huizenga (R-Mich.), Rep. William R. Timmons (R-S.C.), Rep. Tim Moore (R-N.C.), Rep. Roger Williams (R-Texas), Rep. Mike Haridopolos (R-Fla.) and Rep. Zachary Nunn (R-Iowa).