WASHINGTON, D.C. – In the latest gift to their big bank mega donors, U.S. Senate Republicans voted in lockstep today for a joint resolution opposing a Consumer Financial Protection Bureau (CFPB) rule that would require more transparency and accountability in small business loans, similar to home mortgages, by compiling demographic data on loan applications. Senate Republicans went on record against collecting this data that can be used by regulators to expose acts of discrimination and increase access to credit for traditionally underserved small businesses like those owned by women, people of color, and LGBTQ entrepreneurs. A previous analysis from government watchdog Accountable.US found Senate Banking Committee Republicans have taken at least $3.4 million from banks and banking industry groups that paid over $1.14 billion in discrimination settlements and criticized CFPB enforcement of discriminatory practices.
Conservatives in Congress often claim to be champions of small business, but when push comes to shove, their big business donors always come first. There’s nothing pro-small business about helping big banks hide demographic data that could open opportunities for entrepreneurs from traditionally underserved communities. Senate Republicans got their wish today: they’re now on record in favor of sweeping lending discrimination under the rug to the benefit of their financial industry donors and at the expense of small business.”
Accountable.US’ Jeremy Funk.
As Senator Sherrod Brown (D-OH) stressed on the Senate floor today, small businesses owned by women or people of color are much more likely to be denied loans and get hit with higher interest rates.
“Discrimination should never be a normal part of doing business no matter how much industry and their allies in Congress claim the practice is ‘fair,’” added Funk. “Based on just their known histories of criminal discrimination, it’s obvious many banks have a tendency to deny loans for no good reason to certain communities. And it’s telling that the industry has gone so far as to sue the federal government to keep their demographic lending data a secret. What more do they have to hide?”
The CFPB’s new rule requiring lenders to collect demographic data from small-business borrowers is currently in limbo after a Bush-appointed federal judge in Texas blocked the CFPB from enforcing the regulation in July. Plaintiffs in the anti-CFPB lawsuit include Texas Bankers Association and American Bankers Association, which teamed up on another lawsuit in Texas last year seeking to reverse the CFPB’s crackdown on illegal discrimination in the financial industry – while raising dubious arguments about the CFPB’s structure and authority. As government watchdog Accountable.US has documented, numerous companies, executives and industry special interests linked to the lawsuit challenging the CFPB’s authority have troubling histories of discrimination or an ax to grind against the Bureau for successfully protecting consumers from abuse and mistreatment. These lawsuits and today’s Senate resolution are all part of a long-running, organized effort by greedy industries and politicians in their pocket to defang, defund or do away with the CFPB because it works so well to protect consumers from financial scams, discrimination and predatory behavior.