As discussed here, during the summer of 2023, 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 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.
On December 19, 2023, President Biden predictably vetoed the joint Congressional resolution of disapproval stating: “By hampering efforts to promote transparency and accountability in small business lending, Republicans are siding with big banks and corporations over the needs of small business owners. Small businesses are the engines of our economy, and my Administration will not support policies that hurt their ability to thrive and grow.” On January 10, 2024, the Senate voted on whether to override the President’s veto but fell short of the necessary two-thirds vote.
The future of the Final Rule now lies with the courts. As discussed here, on October 26, 2023 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 during the first half of 2024. If the Supreme Court overturns the Fifth Circuit decision, the nationwide injunction requires the CFPB to extend small business lenders’ compliance dates to compensate for the period stayed.