What's New? CFPB proposed changes to Section 1071

The Consumer Financial Protection Bureau (CFPB) has issued a new proposed rule to substantially revise the 2023 small business lending data collection and reporting rule under Section 1071, aiming to reduce regulatory burden and ensure the long-term success of the data collection regime by initially commencing with a narrower scope. To focus on core lenders and businesses, the proposal raises the covered financial institution origination threshold from 100 to 1,000 transactions, excludes products like merchant cash advances and agricultural lending, and changes the small business gross annual revenue definition from 5 million or less to 1 million or less. Additionally, the CFPB proposes removing discretionary data points, such as pricing information and denial reasons, to focus on statutory requirements, and setting a single compliance date of January 1, 2028, for all institutions above the new threshold.

Stay tuned as the proposed rule progresses through regulatory bodies.