FOR IMMEDIATE RELEASE
Wednesday, October 18, 2023
CONTACTS:
Alan Pyke, apyke@ncrc.org
Vincenza Previte, vincenza.previte@responsiblelending.org
William Pierre-Louis, Jr., william@ourfinancialsecurity.org
NCRC, CRL and AFR Blast Senate Democrats for Betraying Small Business Owners with Vote to Rescind Section 1071
WASHINGTON, DC — Five Democratic Senators betrayed small business owners Wednesday by voting with Republicans to rescind recently finalized small business lending data rules known as Section 1071, leading consumer advocacy groups said.
From National Community Reinvestment Coalition (NCRC) President and CEO Jesse Van Tol:
It’s disturbing to see Senators Tester, King, Hickenlooper, Sinema and Manchin betray small business borrowers by putting their names on this cynical and absurd maneuver. The only people on earth who benefit from killing Section 1071 are bankers who would rather not get caught discriminating against non-White, non-male small business owners.
Transparency in small business lending is vital to fostering economic opportunity for all Americans. Congress ordered the Consumer Financial Protection Bureau to write these rules more than a decade ago. The Congressional Review Act is supposed to be a common-sense method for the same lawmaking body that gives regulators an order to vet whether the regulators followed their instructions correctly. But now the 118th Congress is pretending to speak for the intentions of the 111th Congress.
Sens. Sinema, Manchin, Hickenlooper and King are on particularly suspect footing here, since none of them were even in Congress when Section 1071 became law. Senator Tester has held himself out as a staunch ally of the working class throughout his career – but here cast a vote for the donor class.
Killing the 1071 rules that the CFPB spent more than a year studying, drafting and revising to reflect industry feedback will only make it harder for entrepreneurs to get fair access to capital. This is a vote to help rich bankers – and to hurt hardworking people in Maine, Arizona, West Virginia, Colorado, Montana and every other part of this country.
I urge President Biden to veto this measure immediately.
From Center for Responsible Lending (CRL) President Mike Calhoun:
“We strongly oppose the Senate’s CRA bill and urge the House to support the small businesses that power the nation’s economy, including minority and women-owned businesses. We also urge President Biden to veto the CRA bill if it reaches his desk. A robust 1071 rule is crucial. It will spur entrepreneurship in communities that have historically lacked sufficient access to capital and create an expanded pathway to economic prosperity for millions of Americans.”
From Americans for Financial Reform (AFR) Executive Director Lisa Donner:
“We are deeply disappointed in all those who voted against implementing Section 1071. This is a missed opportunity to reduce ongoing disparities in access to small business credit. 1071 shares data with small businesses, regulators, and the public in order to understand and address historical patterns of discrimination and exclusion, which can help address the racial wealth gap. Those who voted against the rule turned their backs on the economic mobility of communities around the country.”
The five Senators – including Sens. King and Sinema, Independents who caucus with the Democrats – voted Wednesday to advance a long-shot attempt by Republicans to rescind a final Section 1071 rule published this past March. Those rules will make it far easier to identify and root out any potential discrimination in small business lending. Some changes the agency made between the proposed and final rules narrowed the scope of the data collecting regime in ways that reflected industry requests, while others retained proposals favored by community groups including NCRC.
Wednesday’s vote utilizes the Congressional Review Act, a decades-old law that can be used to invalidate regulations. President Biden has vetoed several such attempts at unmaking regulations since taking office, and Republican leaders have never rallied the two-thirds majorities in both chambers that would be required to override such a veto under the Act.
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The National Community Reinvestment Coalition is a network of organizations and individuals dedicated to creating a nation that not only promises but delivers opportunities for all Americans to build wealth and live well. Learn more at ncrc.org.
Americans for Financial Reform convenes a nonpartisan coalition of more than 200 civil rights, consumer, labor, business, investor, faith-based, and civic and community groups dedicated to reforming the financial system.