Providing for Congressional Disapproval of the Rule Submitted By the Bureau of Consumer Financial Protection Relating to ``Small Business Lending Under the Equal Credit Opportunity Act (Regulation B)''

Floor Speech

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Mr. BARR. Madam Speaker, I rise today in support of my good friend and colleague, the small business owner from Texas, Congressman Williams, and I support his resolution under the Congressional Review Act to nullify the CFPB Small Business Lending Rule, or section 1071 of the Dodd-Frank Act.

The small business lending rule that was finalized in March is incredibly onerous. It imposes massive burdens on financial institutions. It will be misleading and confusing for borrowers. It will ultimately harm the very small business owners, the minority- and women-owned small business owners, that they say they want to help because those are the businesses that will not have access to capital-- certainly not affordable capital.

While the Dodd-Frank Act does charge the Bureau with adopting rules regarding small business lending, Director Chopra's rule goes far beyond Congressional intent. By requiring the collection of 81 data fields, it greatly exceeds what is mandated by statute.

As has been said very eloquently, it will be extremely burdensome on financial institutions, leading to increased costs and less availability of credit for millions of Main Street borrowers and entrepreneurs.

I have to address this absurd argument about the voluntary nature of the disclosures here. If this is really voluntary--and I want the CFPB to hear this, the advocate of this rule, I want them to hear.

If this is totally voluntary, when my constituents do not provide the CFPB with this information, I want the CFPB to go back and watch the tape, because I don't want my constituents to then be punished by the CFPB when they are not given the information they want. I am going to tell my constituents who are being harassed by this bureaucracy to go back and listen to the ranking member because she said it is voluntary. I want them to quote the ranking member to CFPB when the CFPB harasses them for bureaucracy.

Then, I want everyone here in this Chamber to recognize that this week, in the Committee on Financial Services, I asked Director Chopra if he recognizes that if a small business owner fails to understand why demographic information--irrelevant, by the way, to creditworthiness of the borrower--demographic data is being collected, it could lead to confusion and misunderstanding and potential liability for the financial institution.

For example, the rule requires small business owners to disclose their race, their ethnicity, and their gender or sexual orientation when applying for that loan. They have to give this information prior to underwriting. If that loan is denied, the applicant could be reasonably led to believe that that demographic information was the basis for the denial and not the myriad of other legitimate factors which play into lending decisions.

Madam Speaker, Director Chopra agreed with me that this could be confusing to the borrower.

Clearly, there are a lot of important factors that were not been properly considered prior to the finalization of this rule.

Does this make sense?

I thought we got to a point in the country where race was not supposed to matter, but the other side of the aisle thinks race is the only thing that matters, and that is wrong. That is wrong.

This rule's requirement will force many community banks and credit unions across the country to exit small business lending altogether. That is what my constituents tell me.

Small banks across Central/Eastern Kentucky tell me this is so burdensome; the requirements are so ridiculous that they are just going to exit small business lending altogether.

Now, how does that help the minority-owned small business on Main Street USA? It hurts them.

This is absurd that we would actually hurt minority-and women-owned small businesses by burdening them with massive amounts of red tape.

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Mr. BARR. Madam Speaker, finally, I want to address this ridiculous argument from my colleagues on the other side of the aisle who constantly cite this poll that they keep talking about, which Democrats wanted. They say, oh, the American people love the CFPB because it describes the CFPB as the Salvation Army or something.

The truth of the matter is, if the poll was asked with the truthful information--that this agency drives up the cost and decreases the availability of credit, increases regulatory costs for small businesses, increases interest costs for Americans for their credit cards when they pay on time, decreases access to consumer credit, and is completely exempt from the appropriations process and totally unaccountable--if you ask the question the truthful way, the American people overwhelmingly say the CFPB is a failure.

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