Press releases

Kennedy champions bill to repeal woke CFPB rule forcing banks to collect data on sex, ethnicity from small businesses

Feb 12 2025

WASHINGTON – Sen. John Kennedy (R-La.) today introduced a bill to repeal the Biden administration’s Consumer Financial Protection Bureau (CFPB) rule that would implement Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Section 1071 amends the Equal Credit Opportunity Act (ECOA) to require financial institutions to collect certain personal information on small businesses when they seek a loan.

In 2023, Congress passed Kennedy’s joint resolution of disapproval under the Congressional Review Act to reverse the Biden administration’s rule, which requires banks to report to the CFPB on small business owners’ race, ethnicity and sex; and whether a business is minority-owned, women-owned or LGBT-owned. However, President Joe Biden vetoed the resolution, and the rule remains in effect.

“President Biden’s woke CFPB put small business owners’ information at risk by requiring their personal details to be exposed online. My bill would repeal the last administration’s misguided regulation so that job creators’ private information isn’t public, and government doesn’t stand in the way of Main Street’s access to loans,” Kennedy said.

Rep. Roger Williams (R-Texas) introduced the bill in the House of Representatives.

Background:

  • On March 30, 2023, the CFPB promulgated the final rule implementing Section 1071 of the Dodd-Frank Act, which amends the ECOA. The rule was published in the Federal Register on May 31, 2023.
  • Section 1071 requires covered financial institutions to collect and report certain personal information on small business loan applicants and report that to the CFPB. The CFPB may then make certain parts of that information public, including data that could publicly identify the small business credit applicant.
  • In order to comply with the Biden CFPB rule, financial institutions would have to collect information about applicants, including the applicant's census tract, North American Industry Classification System and years in business, among other personal information.
  • The rule applies to financial institutions that originated at least 100 small business loans in each of the two preceding calendar years.
  • Based on the number of credit transactions for small businesses, covered financial institutions must comply with the final rule beginning Oct. 1, 2024; April 1, 2025; or Jan. 1, 2026.
  • A small business is defined as a company with $5 million or less in revenue from the previous fiscal year. 
  • Among the many concerns about the CFPB’s collecting and storing such personal information is that the agency recently experienced a data breach including the personally identifiable information of 256,000 consumers and failed to properly inform them for two months.
  • The implementation of this rule may reduce the availability and accessibility of small business credit by increasing compliance costs of lenders.

Sens. Cindy Hyde-Smith (R-Miss.), Joni Ernst (R-Iowa), John Boozman (R-Ark.), Roger Wicker (R-Miss.), John Barrasso (R-Wyo.), Mike Rounds (R-S.D.), Steve Daines (R-Mont.) and Ted Cruz (R-Texas) cosponsored the bill.

Text of the bill is here.