Biden vows to veto Kennedy’s plan to scrap ‘woke’ small business lending rule.

President Biden ‌Vows to Veto Republican Measure on Small Business Data Collection

President Joe⁣ Biden has taken a firm stance against Senate Republicans’ ​proposal ⁤to cancel a‌ rule that requires banks to collect data on small business owners when they apply for⁣ loans. The measure in ‌question aims‌ to roll back the implementation of Section 1071 ⁢of ‌the ⁤Dodd-Frank Act⁣ by the Consumer‌ Financial Protection ⁣Bureau (CFPB). This rule mandates financial⁤ institutions to⁣ gather ⁤and report ‍specific ⁤personal information to ⁣the CFPB regarding small businesses seeking credit,⁤ including those owned by ⁣women or minorities. Critics, particularly‍ Republicans, argue​ that the rule is burdensome,⁢ intrusive, and part ​of a “woke” agenda.

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The resolution, led by Senator John Kennedy (R-LA), has been ⁢advanced through the ⁤Congressional Review Act, which expedites⁢ the ‍process of canceling administrative rules by bringing them to ⁤the floors of the‌ House and Senate.‍ Ahead of the vote, the White House has strongly opposed Kennedy’s proposal, emphasizing that ⁣the rule‍ provides crucial information about the vast​ small ⁣business financing market to owners, lenders, ⁢and the public. The White⁤ House has made it⁢ clear that President​ Biden intends to veto the measure if it reaches his ​desk.

White House: Transparency and Accountability at Stake

The administration argues that the resolution⁣ would hinder efforts to promote transparency and accountability in small business lending. ‍It would ⁣also create obstacles for‌ mission-driven lenders and community organizations striving to address the capital‌ access gaps faced by minority- and women-owned ​businesses.

Republicans: Privacy Invasion and​ Wasted Resources

Senator Kennedy‌ and his ‍Republican allies contend that the CFPB’s pursuit of personal‍ demographic and other information poses a risk to small business owners’ privacy and is part of the Biden⁢ administration’s broader attempt to exert control over businesses. They argue that reporting such personal details is⁢ an ⁣invasion ⁣of privacy and a wasteful ​endeavor driven by a “woke” agenda, potentially hampering lending to Main Street.

The ‍CFPB aims to collect data ⁤on ‌the race, ethnicity, gender, and minority, women, or LGBT⁣ ownership status of small business owners. ‍The rule applies to financial institutions that have provided⁤ 100 or more ⁤small business loans in each of the past two calendar​ years. ⁤A small business, within the⁣ context of this rule,​ is defined as a company with revenue of $5 million or ‌less.

The rule⁤ is ​scheduled to take effect for ⁣financial institutions with the⁢ highest volume ‌of covered credit transactions as ‍early as October next year. However, institutions with the ‌lowest transaction ​volume have until 2026‍ to comply, according to the final rule.

Senator​ Kennedy previously expressed concerns about privacy during a June hearing with CFPB Director Rohit⁣ Chopra, questioning why the CFPB needs to know personal ‍details about‍ small‌ business owners, ​including their sexual ⁣preferences.

Republicans ⁢Challenge Biden’s Regulatory Expansion

This is not ‌the first time congressional Republicans have used the Congressional Review Act to push back against the Biden administration’s rulemaking, which has significantly increased the pace of federal regulations ‍compared to previous administrations.⁤ Earlier this year, two Democratic senators joined ‌the GOP in canceling⁢ a Labor ⁣Department rule that allowed retirement plan managers to‍ consider environmental and social issues when making ​investments. The House also passed ​the measure, resulting in Biden’s​ first veto as president. Republicans have made curbing the administrative state a top priority in⁤ response​ to the ​multitude of new Biden rules.

In June, the House passed⁣ legislation that ‌targets executive branch rulemaking.⁤ If enacted, the Regulations from‌ the Executive In Need of Scrutiny Act would require House and Senate⁣ approval⁤ for every⁤ new “major rule” proposed by federal agencies before‌ it can take effect. This act would fundamentally ​change‍ how presidential administrations utilize the federal bureaucracy, ⁢subjecting major changes to congressional oversight.

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What disparities⁤ in⁣ access to small business credit exist⁣ for historically disadvantaged groups in calendar years?

Calendar years. The purpose of this data collection is to ‍help identify and address disparities in ⁤access to small business credit, particularly for historically disadvantaged groups.

The Biden administration believes that this​ data is critical ⁢in understanding the barriers that small business owners face when seeking financing. By collecting⁤ information on race, ethnicity, and gender, policymakers‌ can better ‍tailor programs and policies to ‌support minority⁣ and women-owned businesses. This data will provide valuable insights into the lending patterns and practices ‌of financial institutions, allowing for targeted interventions to ⁣address any ⁤disparities that exist.

However, Republicans argue that the⁤ collection‍ of this data is an‌ unnecessary⁣ intrusion into the privacy of small ‍business owners. They claim that it undermines the ​principles of free market capitalism and ‌further empowers government bureaucracy. According to their​ perspective, the government should not ​have the authority to collect such personal ‍information, as it infringes upon⁣ individuals’ rights to privacy⁢ and poses a ⁢potential risk to their businesses.

The debate ​over​ this measure reflects a broader ideological⁣ divide between the two⁢ parties. Democrats‍ see the government as playing a proactive​ role ⁣in promoting ⁤equality and fairness, whereas ⁢Republicans emphasize‍ smaller government and individual freedoms. While both sides agree that fostering small business​ growth⁣ is important, they differ in their proposed approaches ‍and the role that data collection plays in achieving this objective.

Given President Biden’s explicit vow ‌to veto ⁢the Republican measure, ⁢it appears that the ‍data collection requirement will ‌remain in place. ​The administration firmly believes that transparency and accountability in small business lending are at stake, and that⁣ collecting this data is instrumental in ‌addressing the disparities that exist ⁢in access to credit.⁤ Going forward, the implementation and enforcement of Section⁣ 1071 will‍ continue to be a point of contention and debate between the two parties.