On January 26, Senators Edward J. Markey (D-Mass.), Elizabeth Warren (D-Mass.), Mazie Hirono (D-Hawaii), and Cory Booker (D-NJ) sent a letter to Acting Director of the Consumer Financial Protection Bureau (CFPB), Russell Vought. The lawmakers expressed opposition to two proposed CFPB rule changes that they say would weaken protections against discriminatory lending practices affecting small businesses.
The senators argue that these proposed rules would reduce efforts to collect data on lending disparities and limit the ability of small businesses to pursue discrimination claims under the Equal Credit Opportunity Act. According to the letter, such changes could harm minority and underserved entrepreneurs by ignoring ongoing discriminatory lending practices.
Data from Massachusetts indicates that minority entrepreneurs face greater difficulties in obtaining capital compared to white-owned businesses. Minority business owners are denied financing at nearly twice the rate of their white counterparts, resulting in an unmet demand for more than $600 million in financing each year. The lawmakers noted that differences in financial health or creditworthiness do not fully explain this gap, as research shows less favorable treatment by loan officers toward minority entrepreneurs.
In their letter, the senators wrote: “The CFPB’s 2023 rule to implement Section 1071 recognized that if we want fair markets, we need fair and complete information. Congress did not ask the CFPB to collect the bare minimum of data, and only from the biggest banks and credit unions. Congress asked for real insight and sunlight. The proposed rule replaces sunlight with a keyhole perspective.”
They continued: “On the same day that the CFPB published the proposed rule to eviscerate its 2023 rule implementing Section 1071, it also proposed a rule to amend provisions relating to disparate impact…Discrimination is not always obvious. Policies that are designed to be facially neutral can have a disparate impact on certain populations: as previously detailed, studies have shown that minority entrepreneurs operating small businesses face higher denial rates and different treatment compared to non-minority entrepreneurs, even when they have similar or stronger business financials or other characteristics. Yet, the CFPB failed to assess the impact of the proposed rule on small business borrowers or to conduct an initial regulatory flexibility analysis regarding those impacts.”
The letter concludes: “Combined, the CFPB’s two proposed rules would obfuscate critical gaps and issues in lending markets for small businesses, especially those in minority and underserved communities, and would undermine tools meant to combat and remedy discrimination. We are left wondering how the CFPB intends to square these proposals with the law Congress passed and the realities small businesses face every day.”
The senators requested written responses from Acting Director Vought by February 4, 2026, seeking clarification on how these changes align with legislative mandates intended to ensure transparency in lending markets.
The Senate Small Business and Entrepreneurship Committee plays a role in supporting informed decision-making on national fiscal priorities through oversight activities based in Washington D.C., according to its official website. It provides policy options related to federal budget components for Congress and contributes comprehensive analysis for fiscal oversight.
