As discussed here, this summer, Representative Roger Williams (R-Texas) and Senator John Kennedy (R-La.) introduced identical Congressional Review Act (CRA) resolutions in the U.S. House and Senate (H.J. Res. 66 and S. J. Res. 32, respectively) disapproving the Consumer Financial Protection Bureau’s (CFPB or Bureau) implementation of the small business data collection and reporting final rule under § 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Final Rule). Under the Congressional Review Act (CRA), a rule promulgated by an administrative agency “shall not take effect (or continue), if the Congress enacts a joint resolution of disapproval.” On October 18, by a bipartisan vote of 53-44, the Senate approved its resolution. On November 29, the House likewise passed a resolution of disapproval by a vote of 221-202.
That same day, CFPB Director Chopra testified before the House Financial Services Committee where he was asked about the Final Rule and, specifically, the Congressional resolution of disapproval. Director Chopra stated the Bureau “would abide by the resolution” if enacted into law.
In response to the Senate’s vote on S.J. Res 32, the White House issued a statement opposing the resolution and vowing to veto it. “This resolution would hamper the efforts to promote transparency and accountability in small business lending and create hurdles for mission-driven lenders and community organizations striving to close the most acute gaps in capital access for minority- and women-owned businesses.” As a result, we don’t expect any immediate impact from this Congressional activity. However, this could be an indication that legislation to amend § 1071 itself might become viable after the next election cycle, depending on how party control of Congress and the White House falls out.
The future of the Final Rule seems less certain in the courts. As discussed here, on October 26, a federal district court in Texas Bankers Association v. CFPB extended its existing injunction against enforcement of the Final Rule to cover all small business lenders nationwide. The injunction in Texas Bankers Association v. CFPB will dissolve if the U.S. Supreme Court reverses the Fifth Circuit in Community Financial Services Association v CFPB (CFSA case), which found the CFPB’s funding structure unconstitutional. The Supreme Court is expected to decide the CFSA case by the summer of 2024.