SACRAMENTO, Calif.—While a recent Senate vote was welcomed by credit unions and other financial institutions, not everyone is equally receptive to the Senate’s resolution of disapproval of a CFPB rule.
As CUToday.info reported here, the Senate has passed a joint resolution of disapproval on the Consumer Financial Protection Bureau’s section 1071 rule. The 1071 rule—finalized in March—would require credit unions to collect and report certain data on applications for credit.
In a statement following the Senate vote, CUNA CEO Jim Nussle said section 1071’s “complexity and costs will ultimately lead to less favorable outcomes and higher costs for small business borrowers, and that credit unions will bear a disproportionate burden under the final rule.”
Among the groups objecting to the Senate resolution, however, is the California Association for Micro-Enterprise Opportunity (CAMEO), which represents companies with one to five employees.
A ‘Blow to Transparency’
CAMEO said the vote to overturn the requirement to collect and report demographic data in small business lending is a “blow to equity and transparency.”
It said the rule would provide “much-needed insight into who does – and doesn’t – receive small business financing, unearthing potential patterns of discrimination.”
“The Senate vote to overturn this rule is part of an ongoing, concerted effort to claw back recent gains in racial equity and legitimize discrimination,” said Carolina Martinez, CEO of CAMEO. “From legal challenges against programs like SBA’s 8(a) to the recent lawsuit against the Fearless Fund, equal opportunity for entrepreneurs of color – who work tirelessly in their pursuit of the American dream – is under attack.
Hoping for a Veto
“If this legislation also passes the U.S. House of Representatives, we are hopeful that President Biden will veto it as part of the Biden-Harris Administration’s deep commitment to equity in small business,” Martinez continued. “CAMEO will continue pushing for lending transparency at both the federal and state level.”
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