The U.S. Senate failed to override President Biden's veto of a bill intended to overturn the Consumer Financial Protection Bureau's (CFPB) Section 1071 rule on small business lending, according to an article published by Consumer Finance Monitor. This development marks a pivotal moment in the ongoing debate over financial regulation and small business lending practices in the United States.
Let's delve into the key aspects of this story:
Presidential Veto and Congressional Override Attempt:
Legal Challenges and Injunctions:
Injunctions in Kentucky and Texas Cases:
Additionally, the Revenue Based Finance Coalition (RBFC) has brought forth another legal challenge. This coalition, representing non-bank entities in sales-based financing, filed a lawsuit against the CFPB in a Florida federal district court. The RBFC argues that their type of financing does not fall under the definition of "credit" as per the Equal Credit Opportunity Act and Regulation B, challenging the CFPB's authority to regulate it under the 1071 Rule.
These events underscore a complex and contentious legal battle surrounding the CFPB's regulatory authority, particularly in the area of small business lending. The resolution of these legal disputes, especially the forthcoming Supreme Court decision, will be crucial in shaping the future regulatory framework for small business lending in the U.S.