The Consumer Financial Protection Bureau (CFPB) issued a final rule on March 30, 2023, consistent with Section 1071 of the Dodd-Frank Act, which requires covered financial insitutions to collect, maintain, report and publicly disclose information about small business lending. The final rule also addresses other areas, such as the rule’s effective and compliance dates, recordkeeping requirements and enforcement provisions.
The data reporting is meant to increase transparency in the lending marketplace to help show whether lenders are servicing the credit needs of small businesses in their communities, including those owned by women, minorities or LGBTQI+ individuals.
Here are key resources that will help make the process easier as you determine your compliance needs and strategies:
1. 12 CFR Part 1002 - Equal Credit Opportunity Act (Regulation B)
The U.S. National Archives and Records Administration Code of Federal Regulations website will be updated to include the regulation for Section 1071. On the website, you can view the current and historical versions of the regulation, as well as view the changes that have occurred most recently.
The CFPB also issued a table of contents for the final rule to make it easier to locate information. In addition, the CFPB website includes interactive bureau regulations with the most recent amendment date listed and allows you to view all versions of the regulation.
Once the CFPB publishes the future version of Regulation B, you will be able to view it here. Until then, you will find the statute changes for Regulation B in the final rule issued by the CFPB on March 30, 2023.
2. Executive summary and small entity compliance guide
The Executive Summary of the Small Business Lending Rule was issued by the CFBP and provides:
- A summary of the institutional coverage.
- Transactional coverage, including small business and covered credit transactions.
- Covered originations, including reportable applications and requirements to collect and report data.
- Provisions regarding availability and publication of data.
- Requirements to limit access to certain data.
- Recordkeeping requirements.
- Effective date and compliance date tiers.
- Transitional provision for determining the number of covered originations.
- Safe harbor and other provisions.
On May 12, 2023, the CFPB also issued the small entity compliance guide for the small business lending rule. The guide provides a detailed summary of the final rule’s requirements. This guide does not replace the final rule, so ensure you are reviewing the final rule in addition to this guide.
The guide will most likely be updated periodically, so always ensure you are referring to the most recent version.
3. Compliance dates and reporting deadlines
Determining if or when you need to comply with the rule should be a high priority for your financial institution.
The Small Business Lending Rule Info Sheet: When must a financial institution begin collecting data and complying with the small business lending rule? issued by the CFPB on March 30, 2023, discusses the compliance date tiers and provides additional information to help you determine when you must begin complying with the final rule. The info sheet includes examples to assist you in better understanding the compliance tiers.
The Small Business Lending Rule: Key Dates for Collecting and Reporting Data chart issued by the CFPB in April 2023 will help determine the key collection and reporting dates for covered financial institutions in each compliance date tier, once you know which compliance date tier you fall into.
4. 1071 data points information
The Small Business Lending Rule: Data Points Chart issued by the CFPB on March 30, 2023, is intended to be used as a reference tool for data points required to be collected and reported under the small business lending rule. The information found in the filing instructions guide for small business lending data collected in 2024 is incorporated into the chart.
The chart also summarizes what information to report when data points are not applicable under the rule and highlights additional guidance in the rule related to data point reporting.
5. 1017 data collection form (demographic information, including owner status)
On April 17, 2023, the CFPB issued a copy of the sample data collection form in multiple file formats. The CFPB’s Small Business Lending GitHub page includes print and source code versions of the form.
6. Additional resources for filers
The small business lending database CFPB webpage includes additional resources for files, such as the current and archived versions of the filing instructions guide, data specs and data validation spec information. This is also the webpage where the data will be submitted and where you will be able to download data once it is published.
7. Submit technical questions
The CFPB has a webpage and an email address where technical questions regarding reporting small business lending data can be submitted. It appears the typical response time is 24-48 hours during normal business hours; however, more time may be required.
How Wipfli can help
Wipfli is here to provide the guidance and support you need to help prepare your financial institution for compliance. Our specialists work with you to establish a solid change management process, helping you boost your performance and feel confident in meeting regulatory compliance requirements.
Contact us to learn more about how we can help you manage the Section 1071 implementation process and analyze data from a fair lending perspective.
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