NEWS: According to a recent court filing, the Consumer Financial Protection Bureau (CFPB) plans to start a new rulemaking process to revise its small business lending rule.
The rule, which implements Section 1071 of the Dodd-Frank Act, requires many lenders to collect and report data on lending to small businesses with gross revenue of $5 million or less in their previous fiscal year. The League has information on the rule in our ii Release No. B083.
The rule has been subject to several lawsuits since its release in 2023. One of those cases is pending in a federal court in Florida. In a filing with that court last week, the CFPB said that it will issue a notice of proposed rulemaking “as expeditiously as reasonably possible” and that it plans to provide periodic status updates to the court.
In its filing, the CFPB acknowledged that several other courts have stayed the compliance dates under the rule for various lenders. “Subjecting similarly situated entities to different compliance dates for Section 1071’s data collection requirements would not serve the public interest,” the CFPB wrote to the Florida court.
The League will keep you updated about further developments regarding this rule.
The small business lending rule was designed to help authorities enforce fair lending laws and to uncover discrimination in lending against minority-owned, women-owned, and LGBTQI+-owned businesses. Opponents have argued that the Bureau exceeded its authority in promulgating the rule, which required lenders to collect more data points that the Dodd-Frank Act mandated.