Small business lending rulemaking

In the Dodd-Frank Wall Street Reform and Consumer Protection Act, Congress directed the Bureau to adopt regulations governing the collection of small business lending data. Section 1071 of the Dodd-Frank Act amended the Equal Credit Opportunity Act (ECOA) to require financial institutions to compile, maintain, and submit to the Bureau certain data on applications for credit for women-owned, minority-owned, and small businesses.

Congress enacted section 1071 for the purpose of:

1. Facilitating enforcement of fair lending laws
2. Enabling communities, governmental entities, and creditors to identify business and community development needs and opportunities for women-owned, minority-owned, and small businesses
   

Compliance date extension

The CFPB is extending compliance deadlines for the small business lending rule. After the CFPB issued this rule on March 30, 2023, some lenders filed challenges against it in federal court in Texas. On July 31, 2023, that court stayed the rule for certain lenders pending the Supreme Court’s decision in CFPB v. CFSA; on October 26, it extended that stay to all lenders covered by the rule. In the event of a reversal in CFSA, the Texas court ordered the CFPB to extend the rule’s compliance deadlines to compensate for the period stayed.

On June 25, 2024, the CFPB issued an interim final rule to extend compliance deadlines. As 290 days have elapsed between the July 31 order and the CFSA decision on May 16, the interim final rule extends compliance dates as follows:

The CFPB is providing an unofficial redline of the small business lending compliance dates interim final rule to illustrate the changes this interim final rule makes to the 2023 final rule.

Final rule and compliance resources

On March 30, 2023, we issued a final rule amending Regulation B to implement changes to ECOA made by section 1071 of the Dodd-Frank Act. Consistent with section 1071, covered financial institutions are required to collect and report to the CFPB data on applications for credit for small businesses, including those that are owned by women or minorities. The rule also addresses our approach to privacy interests and the publication of section 1071 data; shielding certain demographic data from underwriters and other persons; recordkeeping requirements; enforcement provisions; and the rule’s effective and compliance dates.

The CFPB is providing materials and tools to help explain the rule. And we have issued a Filing Instructions Guide for the first year of data collection.

We also released a document describing our methodology for estimating how many banks will be required to report under the rule and for producing market-level estimates of associated costs.

CFPB staff can provide informal guidance in response to questions you submit about the rule.

Notice of proposed rulemaking

On September 1, 2021, we issued a proposed rule amending Regulation B to implement changes to ECOA made by section 1071 of the Dodd-Frank Act.

We released a table of contents for this notice as well as a summary of the proposed rule and chart of proposed data points to assist the public in reviewing our proposal. We also released a document describing our methodology for estimating how many banks would be required to report under the proposed rule and for producing market-level estimates of associated costs.

We received approximately 2,100 comments on its proposal.

SBREFA Outline of proposals and Panel report

Under the process established by Congress in the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), we are required to consult with representatives of small entities likely to be affected directly by the regulations we are considering proposing and to obtain feedback on the likely impacts the rules we are considering would have on small entities.

On September 15, 2020, we released an Outline of Proposals Under Consideration and Alternatives Considered, which describes proposals that we are considering to implement section 1071 along with the relevant law, the regulatory process, and an economic analysis of the potential impacts of the proposals on directly affected small entities.

Outline of Proposals Under Consideration and Alternatives Considered

High-Level Summary of Outline of Proposals Under Consideration for SBREFA

Discussion Guide for Small Entity Representatives

On October 15, 2020, the CFPB convened a Small Business Review Panel for its section 1071 rulemaking. The panel is comprised of a representative from the CFPB, the Chief Counsel for Advocacy of the Small Business Administration, and a representative from the Office of Information and Regulatory Affairs in the Office of Management and Budget. The panel collects advice and recommendations from representatives of small entities that are likely to be subject to the regulation that the CFPB is considering proposing.

On December 15, 2020, we released the Final Report of the Small Business Review Panel on the CFPB’s Proposals Under Consideration for the Small Business Lending Data Collection Rulemaking. This report includes a summary of the feedback received from small entity representatives during the panel process, and findings and recommendations made by the panel.

Final Report of the Small Business Review Panel on the CFPB’s Proposals Under Consideration for the Small Business Lending Data Collection Rulemaking