Earlier this week, the Consumer Financial Protection Bureau (CFPB) announced an update to Section 1071, the small business lending rule, extending compliance deadlines following recent court rulings. This move, aimed at providing clarity and additional time for lenders, comes in the wake of the Supreme Court decision in CFPB v. CFSA. Background of the Rule and Legal Proceedings The small business lending rule, initially issued by the CFPB on March 30, 2023, faced a temporary […]
Category: Section 1071
Section 1071: Where We Stand Now
Since Section 1071 of the Dodd-Frank act was finalized by the CFPB on March 30, 2023, it has been surrounded by controversy. The rule, requiring small business lenders to collect race, gender, and other demographic data from small business loan applicants, was more than a decade in the making but with various legal actions complicating the picture, let’s take a look at where Section 1071 stands now. Controversy in Congress Earlier this month, the Senate […]
Additional FAQs Released by CFPB on Section 1071
Today, the CFPB released additional, more extensive Frequently Asked Questions on Section 1071, Small Business Data Collection and Reporting requirements. The expanded list of questions extends beyond the Institutional Coverage and Small Business/Credit transactions they released in June of this year, to include guidance on Firewall and Record Retention. In addition to the new sections, the CFPB also added additional questions and more details to the prior sections of the FAQ. It is important to […]
U.S. District Court Grants Stay on Section 1071 Compliance Dates
On July 31st, a U.S. District Court in Texas granted a stay on the compliance dates for members of the American Bankers Association (ABA) and Texas Bankers Association (TBA) with respect to the CFPB’s Section 1071 rule that was released earlier this year. The stay will remain in effect until the Supreme Court makes a final decision on the constitutionality of the CFPB’s funding structure. This review is scheduled for October of this year, but […]
How CRA, Section 1071, and Fair Lending Intersect
With the introduction of Section 1071’s final rule earlier this year and the anticipation of the interagency update to CRA, compliance departments across the country are grappling with the regulatory frameworks that support fair lending and consumer protection. Here’s an overview of how these three components, Section 1071, CRA, and Fair Lending, relate to each other: Section 1071 Data Collection Through the collection and reporting of data related to lending practices, specifically for small businesses […]