Comment for 1002.114 - Effective Date, Compliance Date, and Special Transition Rules

This version is not the current regulation.

You are viewing a previous version of this regulation with amendments that went into effect on June 30, 2026.

View all versions of this regulation

Previous version (effective June 30, 2026 to July 21, 2026)

114(b) Compliance Date

1. Application of initial compliance date. The compliance date in § 1002.114(b) is the date by which the covered financial institution must begin to compile data as specified in § 1002.107, comply with the firewall requirements of § 1002.108, and begin to maintain records as specified in § 1002.111. In addition, the covered financial institution must comply with § 1002.110(c) and (d) no later than June 1 of the year after the compliance date.

2. [Reserved].

3. [Reserved].

4. Examples. The following scenarios illustrate how to determine whether a financial institution is a covered financial institution subject to the initial compliance date specified in § 1002.114(b)(1).

i. Financial Institution A originated 3,000 covered credit transactions for small businesses in calendar year 2026, and 3,000 in calendar year 2027. Financial Institution A has a compliance date of January 1, 2028.

ii. [Reserved].

iii. [Reserved].

iv. Financial Institution D originated 990 covered credit transactions to small businesses in calendar year 2026, 1,020 in calendar year 2027, and 990 in calendar years 2028 and 2029. Because Financial Institution D did not originate at least 1,000 covered credit transactions for small businesses in each of 2026 and 2027, it is not subject to the initial compliance date set forth in § 1002.114(b)(1). Because Financial Institution D did not originate at least 1,000 covered credit transactions for small businesses in subsequent consecutive calendar years, it is not a covered financial institution under § 1002.105(b) and is not required to comply with the rule in 2029 or 2030.

v. [Reserved].

vi. Financial Institution F originated 990 covered credit transactions for small businesses in calendar year 2026, and 1,020 in 2027, 2028, and 2029. Because Financial Institution F did not originate at least 1,000 covered credit transactions for small businesses in each of 2026 and 2027, it is not subject to the initial compliance date set forth in § 1002.114(b)(1). Because Financial Institution F originated at least 1,000 covered credit transactions for small businesses in subsequent calendar years, § 1002.114(b)(4), which cross-references § 1002.105(b), applies to Financial Institution F. Because Financial Institution F originated at least 1,000 covered credit transactions for small businesses in each of 2027 and 2028, it is a covered financial institution under § 1002.105(b) and is required to comply with the rule beginning January 1, 2029.

114(c) Special Transition Rules

1. Collection of certain information prior to a financial institution’s compliance date. Notwithstanding § 1002.5(a)(4)(ix), a financial institution that chooses to collect information on covered applications as permitted by § 1002.114(c)(1) in the 12 months prior to the initial compliance date as specified in § 1002.114(b)(1) need comply only with the requirements set out in §§ 1002.107(a)(18) and (19), 1002.108, and 1002.111(b) and (c) with respect to the information collected. During this 12-month period, a covered financial institution need not comply with the provisions of § 1002.107 (other than §§ 1002.107(a)(18) and (19)), § 1002.109, § 1002.110, § 1002.111(a), or § 1002.114.

2. Transition rule for applications received prior to a compliance date but final action is taken after a compliance date. If a covered financial institution receives a covered application from a small business prior to the initial compliance date specified in § 1002.114(b)(1), but takes final action on or after that date, the financial institution is not required to collect data regarding that application pursuant to § 1002.107 nor to report the application pursuant to § 1002.109. For example, if a financial institution receives an application on December 27, 2027, but does not take final action on the application until January 25, 2028, the financial institution is not required to collect data pursuant to § 1002.107 nor to report data to the Bureau pursuant to § 1002.109 regarding that application.

3. Has readily accessible the information needed to determine small business status. A financial institution has readily accessible the information needed to determine whether its originations of covered credit transactions were for small businesses as defined in § 1002.106 if, for instance, it in the ordinary course of business collects data on the precise gross annual revenue of the businesses for which it originates loans, it obtains information sufficient to determine whether an applicant for business credit had gross annual revenues of $1 million or less, or if it collects and reports similar data to Federal or State government agencies pursuant to other laws or regulations.

4. Does not have readily accessible the information needed to determine small business status. A financial institution does not have readily accessible the information needed to determine whether its originations of covered credit transactions were for small businesses as defined in § 1002.106 if it did not in the ordinary course of business collect either precise or approximate information on whether the businesses to which it originated covered credit transactions had gross annual revenue of $1 million or less. In addition, even if precise or approximate information on gross annual revenue was initially collected, a financial institution does not have readily accessible this information if, to retrieve this information, for example, it must review paper loan files, recall such information from either archived paper records or scanned records in digital archives, or obtain such information from third parties that initially obtained this information but did not transmit such information to the financial institution.

5. Reasonable method to estimate the number of originations. The reasonable methods that financial institutions may use to estimate originations for 2026 and 2027 include, but are not limited to, the following:

i. A financial institution may comply with § 1002.114(c)(2) by determining the small business status of covered credit transactions by asking every applicant, prior to the closing of approved transactions, to self-report whether it had gross annual revenue for its preceding fiscal year of $1 million or less, during the period October 1 through December 31, 2026. The financial institution may annualize the number of covered credit transactions it originates to small businesses from October 1 through December 31, 2026, by quadrupling the originations for this period, and apply the annualized number of originations to both calendar years 2026 and 2027.

ii. A financial institution may comply with § 1002.114(c)(2) by asking a representative sample of applicants for covered credit transactions whether they are small businesses.

iii. A financial institution may comply with § 1002.114(c)(2) by using another methodology provided that such methodology is reasonable and documented in writing.

6. Examples. The following scenarios illustrate the potential application of § 1002.114(c)(2) to a financial institution’s initial compliance date under § 1002.114(b). Unless otherwise indicated, in each example the financial institution has chosen to estimate its originations for 2026 and 2027 (rather than 2025 and 2026 as permitted by § 1002.114(c)(3)) to determine whether it is subject to the initial compliance date set forth in § 1002.114(b)(1).

i. Prior to July 1, 2026, Financial Institution A did not collect gross annual revenue or other information that would allow it to determine the small business status of the businesses for whom it originated covered credit transactions in calendar year 2026. Financial Institution A chose to use the methodology set out in comment 114(c)-5.i and as of July 1, 2026, began to collect information on gross annual revenue as defined in § 1002.107(a)(14) for its covered credit transactions originated for businesses. Using this information, Financial Institution A determined that it had originated 750 covered credit transactions for businesses that were small as defined in § 1002.106. On an annualized basis, Financial Institution A originated 3,000 covered credit transactions for small businesses (750 originations * 4 = 3,000 originations per year). Applying this annualized figure of 3,000 originations to both calendar years 2026 and 2027, Financial Institution A is subject to the initial compliance date set forth in § 1002.114(b)(1).

ii. Prior to July 1, 2026, Financial Institution B collected gross annual revenue information for some applicants for business credit, but such information was only noted in its paper loan files. Financial Institution B thus does not have reasonable access to information that would allow it to determine the small business status of the businesses for whom it originated covered credit transactions for the first half of calendar year 2026. Financial Institution B chose to use the methodology set out in comment 114(c)-5.i, and as of October 1, 2026, Financial Institution B began to ask all businesses for whom it was closing covered credit transactions if they had gross annual revenues in the preceding fiscal year of $1 million or less. Using this information, Financial Institution B determined that it had originated 850 covered credit transactions for businesses that were small as defined in § 1002.106. On an annualized basis, Financial Institution B originated 3,400 covered credit transactions for small businesses (850 originations * 4 = 3,400 originations per year). Applying this estimated figure of 3,400 originations to both calendar years 2026 and 2027, Financial Institution B is subject to the initial compliance date set forth in § 1002.114(b)(1).

iii. [Reserved].

iv. Financial Institution D did not collect gross annual revenue or other information that would allow it to determine the small business status of the businesses for whom it originated covered credit transactions in calendar years 2026 and 2027. Financial Institution D determined that it had originated 3,000 total covered credit transactions for businesses in each of 2026 and 2027. Applying the methodology specified in comment 114(c)-5.ii, Financial Institution D assumed that all 3,000 covered credit transactions originated in each of 2026 and 2027 were to small businesses. On that basis, Financial Institution D is subject to the initial compliance date set forth in § 1002.114(b)(1).

v. [Reserved].

vi. Financial Institution F does not have readily accessible gross annual revenue or other information that would allow it to determine the small business status of the businesses for whom it originated covered credit transactions in calendar years 2026 and 2027. Financial Institution F determined that it had originated 480 total covered credit transactions for businesses in 2026 and 550 total covered credit transactions for businesses in 2027. Applying the methodology set out in comment 114(c)-5.ii, Financial Institution F assumed that all such transactions originated in 2026 and 2027 were originated for small businesses. On that basis, Financial Institution F is not subject to the initial compliance date set forth in § 1002.114(b)(1).

vii. Financial Institution G chose to estimate its originations for 2025 and 2026 (rather than 2026 and 2027), as permitted by § 1002.114(c)(3), and does not have readily accessible gross annual revenue or other information that would allow it to determine the small business status of the businesses for whom it originated covered credit transactions in either of those calendar years. Financial Institution G chose to use the methodology set out in comment 114(c)-5.i, and as of October 1, 2025, Financial Institution G began to ask all businesses for whom it was closing covered credit transactions if they had gross annual revenue in the preceding fiscal year of $1 million or less. Using this information, Financial Institution G determined that it had originated 700 covered credit transactions during that period for businesses that were small as defined in § 1002.106. On an annualized basis, Financial Institution G originated 2,800 covered credit transactions for small businesses (700 originations * 4 = 2,800 originations per year). Applying this estimated figure of 2,800 originations to both calendar years 2025 and 2026, Financial Institution G is subject to the initial compliance date set forth in § 1002.114(b)(1).