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ABA Position

America’s banks support the enforcement of the nation’s fair lending laws and the goals of Section 1071 of the Dodd-Frank Act, which requires lenders to collect, and report to the Consumer Financial Protection Bureau, information about lending to “women owned, minority-owned and small businesses.” We believe, however, that the final rule as issued by the CFPB is too far-reaching, will put small businesses’ privacy at risk and will discourage bank lending to small businesses given the cost to collect this data.

On March 30, 2023, the CFPB issued a final rule to implement Section 1071. The final rule applies to banks, credit unions, fintechs and other nonbank lenders that make at least 100 small business loans in each of the two preceding calendar years. Reporting will be required on loans originated as well as applications that do not result in loans. The CFPB expanded the 13 data points Congress mandated, requiring lenders to report a total of 81 data fields including the race, gender, and ethnicity of the business's principal owners, and whether the business is owned by minorities, women, and/or LGBTQI+ individuals.

ABA, the Texas Bankers Association and other trades have challenged the rule, which has resulted in a delay of the rule’s compliance dates while the litigation is pending. However, Section 1071 has not been repealed, and advocacy on the rule’s compliance burden – which will be passed on to small businesses – and invasion of privacy remain critical.

On June 25, 2024, the CFPB issued an interim final rule formally announcing a delay of several months of the compliance deadlines for Section 1071. The CFPB also announced that it does not intend to assess penalties for reporting errors for the first 12 months of collection as long as the institution made good faith efforts to comply with the rule.

The compliance deadline for Tier 1 institutions is now July 18, 2025, with the first filing deadline on June 1, 2026. The compliance deadline for Tier 2 institutions is Jan. 16, 2026, with the first filing deadline June 1, 2027. The compliance deadline for Tier 3 institutions is Oct. 18, 2026, with the first filing deadline also June 1, 2027.

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