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New Rules From Consumer Financial Protection Bureau

Congress really needs to slap down the out-of-control bureaucrats at the Consumer Financial Protection Bureau (CFPB). This is one of the most rogue agencies of the federal government.

Yesterday in the House Rules Committee, we were discussing a resolution of congressional disapproval concerning a new CFPB rule. This rule requires most lenders (e.g. banks) to now collect more than 80 data points on small business applying for loans.

First, let’s back up a second. What are the relevant data points banks SHOULD collect when applying for a loan? Earnings? Assets? Other financial liabilities? Sure. Anything that helps paint a financial picture of the small business and its ability to repay the loan is fair game.

Well, that’s not what the Consumer Financial Protection Bureau is after with their new rule.

Among these new 80+ data points, lenders now need to determine whether the small business is minority-owned or owned by women. Lenders now have to inquire about whether owners are lesbian, gay, bi-sexual, transgender, queer, asexual, etc. (LBGTQIA). Lenders also need to find out the ethnicity, race, and sex of the principal owners.

Tell me, WHAT ON EARTH does any of that have to do with the small business’ ability to repay the loan?

The answer is absolutely nothing. This is well beyond the statutory authority of the CFPB. It’s an onerous, useless requirement that does nothing except drive up costs for lenders, which of course are costs passed along to small businesses.

You better believe these woke bureaucrats at the CFPB aren’t going to stop here. The next step is to require lenders elevate LBGTQIA-owned small businesses, even if their ability to repay loans is in doubt. The step after that will increase penalties on lenders who push back on these requirements.

It never ends with just reporting. There’s always a next step in their plan. The only way to stop it is to defund the CFPB.