Biden vetoes challenge to CFPB small-business data rule

The White House

WASHINGTON — President Joe Biden vetoed a resolution to nullify the Consumer Financial Protection Bureau's small-business data collection rule, as widely expected. 

Congress previously voted to invalidate the rule, which has already been halted by a federal judge pending the Supreme Court's decision on whether the CFPB's funding structure is constitutional, using a Congressional Review Act challenge.  

The contested rule would require fintechs and other lenders to collect race, gender and demographic information before making loans to small-businesses. The banking industry has opposed the rule, saying that its requirements are too onerous. 

Biden, on his late Tuesday night veto of the resolution overturning the CFPB's rule, said that it would "bring much needed transparency to small-business lending and improve the ability of lenders and community organizations to meet the most critical needs of America's small-businesses." 

"This Republican-led resolution would hinder the government's ability to conduct oversight of abusive and predatory lenders, make it harder for 33 million small-businesses across the country to assess lending opportunities and access capital, and make it more difficult for lenders and community groups to address the most acute gaps in capital access for minority- and women-owned businesses," Biden said. "If enacted, this resolution would harm all those that stand to benefit from expanded transparency and accountability." 

Lawmakers voted largely on party lines to approve the resolution, but the vote in both chambers drew some Democratic defectors. Three Democrats — Jon Tester of Montana, John Hickenlooper of Colorado and Joe Manchin of West Virginia — voted in favor of the resolution. Independent Senators Kyrsten Sinema of Arizona and Angus King of Maine — both of whom caucus with Democrats — also supported the resolution. 

In the House, six Democrats voted in favor: Reps. Ed Case of Hawaii, Henry Cuellar of Texas, Jared Golden of Maine, Kathy Manning of North Carolina, Mary Peltola of Alaska and Marie Gluesenkamp Perez of Washington. 

Lawmakers knew early on that Biden would veto the resolution, so the vote to nullify the rule was largely symbolic. Still, Congressional Review Act challenges that pass both the House and the Senate are rare, especially those that can draw bipartisan support.