Georgia Attorney General Chris Carr has sent a letter to the Consumer Financial Protection Bureau (CFPB), urging it to rescind a final rule mandating data collection regarding applications for credit for small businesses.
Today, we are calling on the Biden administration to rescind its burdensome and unwarranted rule that will cripple Georgia’s small businesses and community banks.
➡️ https://t.co/MBuXhLyAIU pic.twitter.com/UHe2AHYoGy
— GA AG Chris Carr (@Georgia_AG) June 12, 2023
The CFPB’s final rule, issued on March 30, requires covered financial institutions making at least 100 small business loans annually to gather data regarding the entities’ applications, including credit prices, geographic figures, lending determinations, and demographic information. Specifically, the final rule requires that banks collect and report data as to whether an applicant is a “Minority-Owned, Women-Owned, and/or LGBTQI+-Owned” business.
Upon receiving the information, the banks must publish the data they collect in a report to the CFPB.
In his letter sent to CFPB Director Rohit Chopra, Carr (pictured above) argues that the rule is “gratuitous, burdensome and expensive,” adding that the reporting of such information under the rule does “absolutely nothing to do with the process of evaluating which applicants are the strongest and most deserving of capital.”
“Government is supposed to support fair business practices and protect a fair, free market system. Apparently, neither you nor the current administration share this view because this rule is a political hammer in search of a nail,” Carr added.
According to the CFPB, the rule is to ensure lenders abide by fair lending laws.
Carr argued, “If discrimination in lending is a rampant problem, we would direct you to the proper channels already in place to remedy this issue. States already have their own consumer protection and anti-discrimination statutes. Additionally, federal fair lending laws already prohibit lenders from discriminating on the basis of race and other characteristics.”
“I ask that this rule be rescinded and federal agencies allow states to continue to address lending issues as they occur, rather than saddling small businesses with burdensome regulations,” Carr said.
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Kaitlin Housler is a reporter at The Georgia Star News and The Star News Network.
Photo “Chris Carr” by Georgia Attorney General Chris Carr. Background Photo “Consumer Financial Protection Bureau” by Ted Eytan. CC BY-SA 2.0.
