On June 28, 2023, the CFPB released a set of Frequently Asked Questions to address for determining institutional coverage focused on areas like:
- Financial Institution Coverage
- Metropolitan Statistical Areas (MSA)
- Types of transactions
- Ag purpose credit
- Refinancings
- Temporary loans
- What to do if you did not collect Gross Annual Revenue for 2022 and 2023
- Covered Credit Transactions and Small Businesses
- Covered credit transactions
- What is a small business
- Individuals and sole proprietorship
The purpose of the FAQs is to help financial institutions determine if they are a covered institution and to properly count transactions for determination of their compliance tier. Additionally, they clarify business entity types specifically for individuals, sole props, and start-ups.
If your institution has determined your tier or are still in the process of trying to create a good methodology for tier determination it would be beneficial to review these FAQs to ensure your methodology aligns with the CFPBs guidance.