Director Chopra to appear before House Financial Services Committee and Senate Banking this week

Posted by John Trull on November 28, 2023

CFPB Director Rohit Chopra is scheduled to testify before the House Financial Services Committee on Wednesday and the Senate Banking Committee on Thursday. These appearances come at a pivotal time, coinciding with a House Resolution vote expressing Congressional disapproval of the Bureau’s Business Lending Data Collection Rule. This follows a similar resolution already passed by the Senate. However, it is anticipated that the President will veto this congressional disapproval. This rule has been a significant topic of discussion, with a stated aim to enhance transparency in business lending, particularly for small and minority-owned businesses. However, the Bureau’s rulemaking authority is currently in a state of uncertainty, following a nationwide injunction against the implementation of the 1071 rule, part of the Dodd-Frank Act, which requires financial institutions to report data on applications for credit for women-owned, minority-owned, and small businesses.

The injunction stems from the Fifth Circuit Court’s finding that the funding structure of the CFPB, which derives its funding directly from the Federal Reserve rather than through congressional appropriations, violates the U.S. Constitution’s Appropriations Clause. While rules issued prior to the Fifth Circuit decision remain in effect, the injunction on the small business lending rule casts doubt on all of the Bureau’s future rulemaking until the issue of its funding structure is resolved. During his testimonies, Director Chopra is anticipated to face rigorous questioning from both the House and Senate on various issues, including the Bureau’s authority and the implications of the injunction.

It is important to emphasize that the rules issued by the Bureau have not been overturned but merely delayed until the question of the funding structure is addressed. In this context, credit unions and other financial institutions should remain vigilant and prepare for the eventuality of the 1071 rule becoming effective. This preparation is crucial, as the rule represents a significant shift in the reporting requirements for business lending. Director Chopra’s testimonies are expected to shed further light on these developments and the Bureau’s future course of action.

Link to – House Financial Services Committee Semi-Annual Report of the Bureau of Consumer Financial Protection (Live stream starts at 10:00 am on Wednesday, November 29)

Link to – Senate Banking Committee Semi-Annual Report of the Bureau of Consumer Financial Protection (Live stream starts at 10:15 am on Thursday, November 30)

Posted in Advocacy on the Move, Federal Advocacy.