CFPB Seeks Feedback Regarding Proposed Small Business Lending Reporting Requirements
On September 15, 2020, the Consumer Financial Protection Bureau (CFPB) issued a news announcement regarding a recently released Outline of Proposals Under Consideration and Alternatives Considered for Section 1071 of the Dodd-Frank Act governing small business lending data collection and reporting.
Section 1071 requires financial institutions to collect certain data regarding applications for credit for women-owned, minority-owned, and small businesses, and to report that data to the Bureau on an annual basis. The Outline describes proposals that the Bureau is considering implementing per 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.
Under the process established by Congress in the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), the CFPB is required to consult with representatives of small entities likely to be affected directly by the regulations being considered and to obtain feedback on the likely impacts those rules would have on small entities. Small entities are encouraged to review the outline and submit feedback regarding the following proposals under consideration:
· Scope of the rulemaking
· Covered lenders
· Covered applicants
· Covered products
· Definitions
· Approaches used for collecting mandatory data points
· Discretionary data points proposed to be collected, including:
o Loan pricing
o Time in business
o NAICS code
o Number of employees
· Shielding data from underwriters and other persons (firewall)
· Applicants right to refuse to provide certain information
· Compiling, maintaining, and reporting data to the CFPB
· Privacy considerations
· Implementation period
The Bureau requests written feedback from small entity representatives (SERs) by November 9, 2020 in order to be considered and incorporated into the SBREFA Panel’s Report. Other stakeholders are also welcome to provide written feedback on the Bureau’s proposals under consideration. Feedback should be emailed to 2020-SBREFA-1071@cfpb.gov no later than December 14, 2020.
For more information, contact Troy Garris at 301-461-8952 or troy@garrishorn.com.
