"As previously reported, in late December 2023 President Biden vetoed legislation adopted by the U.S. House of Representatives and U.S. Senate under the Congressional Review Act to override the CFPB’s final Section 1071 small business lending rule (1071 Rule). The vote in the House was 221-202 and the vote in the Senate was 53-44. Recently, the U.S. Senate voted on whether to override the President’s veto, and the override effort failed by a vote of 54-45, falling short of the necessary two-thirds vote required in both the House and Senate to override a Presidential veto. Thus, regardless of any action taken by the House, the veto will stand.
Nevertheless, currently the CFPB is enjoined from implementing and enforcing the 1071 Rule based on two lawsuits challenging the rule in federal district courts, one in Kentucky, and one in Texas.
The initial rulings in the Kentucky and Texas lawsuits focus on claims by the plaintiffs that the 1071 rule is invalid because the CFPB’s funding structure is unconstitutional, based on the ruling of the U.S. Court of Appeals for the Fifth Circuit that held the CFPB’s funding is unconstitutional in Community Financial Services Association of America Ltd. v. CFPB. On October 3, 2023, the U.S. Supreme Court heard oral arguments in the CFSA v. CFPBcase, and a ruling is not expected until as late as June 2024."