The CFPB issued a notice of proposed rulemaking (NPRM) on its proposal to implement the small business lending data collection requirements set forth in section 1071 of the Dodd-Frank Act. The NPRM has a comment period of 90 days following publication in the Federal Register.
Section 1071 amended the Equal Credit Opportunity Act to require that financial institutions collect and report to the CFPB certain data regarding applications for credit for women-owned, minority-owned, and small businesses, among other requirements.
The CFPB’s proposal would add a new subpart B to Regulation B to implement these requirements; and would require financial institutions to collect and report the amount and type of small business credit applied for and extended, demographic information about small business credit applicants, and key elements of the price of the credit offered.
The CFPB is seeking comment on a variety of issues, including how to define a small business for purposes of this data collection (proposed: $5 million or less in gross annual revenue in the preceding fiscal year?); where to set the activity threshold for when a lender is required to report information (proposed: at least 25 covered credit transactions for small businesses in each of the 2 preceding calendar years?); as well as feedback on the appropriate implementation period for the proposed regulation.
Click here for more information on the rulemaking; and here to visit the CFPB’s Small Business landing page, which includes a “Tell Your Story” portal for small business entrepreneurs.
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