CFPB Gets March Deadline for Small Business Lending Data Rule

The Consumer Financial Protection Bureau must finish rules for collecting data to identify potential discrimination in small business lending early next year, a federal judge ruled.

Judge Jeffrey S. White of the U.S. District Court for the Northern District of California approved an agreement on July 11 between the CFPB and California-based consumer advocates to have the small business lending data collection rule completed by March 31.

Section 1071 of the 2010 Dodd-Frank Act requires the CFPB to collect data on the race, gender, ethnicity, loan terms and other characteristics of small business lending, with an eye toward identifying and combating violations of the Equal Credit Opportunity Act. The CFPB already collects similar data for mortgage lending under the Home Mortgage Disclosure Act.

The CFPB failed to tackle those rules until the California Reinvestment Coalition and other consumer advocates sued the bureau in May 2019.

The sides ultimately reached a settlement and the CFPB released a proposal for conducting the data surveys in September 2021.

The proposal calls for banks, fintechs and other non-bank commercial lenders to provide demographic data on loans to small businesses that had less than $5 million in gross revenues in the preceding year.

Banks and others have said the data collection rule should have a broader exemption for small lenders that only issue a handful of small business loans, and have raised other concerns with the bureau.

The case is California Reinvestment Coalition v. CFPB, N.D. Cal., No. 4:19-cv-02572, Stipulation and Order 7/11/22