The Consumer Financial Protection Bureau (CFPB) has begun to take steps toward implementing rules related to small business lending data collection. On May 10, 2017, the CFPB issued a Request for Information (RFI) regarding the small business lending market. This RFI coincides with a field hearing, on the same topic, set to take place later today in Los Angeles, California.
Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) amended the Equal Credit Opportunity Act (ECOA) to require financial institutions to compile, maintain, and submit to the Bureau certain data on credit applications by women-owned, minority-owned, and small businesses. The Dodd-Frank Act required final rules on this subject by July 2011. Although the CFPB did not meet that deadline, small business lending data collection has been listed on the Agency’s Rulemaking Agenda for many years now. As part of its Spring 2013 Rulemaking Agenda the CFPB listed business lending data as a “long term action”. It retained that status until the CFPB released its Fall 2015 Rulemaking Agenda, which moved business lending data to the primary Rulemaking Agenda with a status of “pre-rule” stage.
The RFI requests responses to questions related to five specific categories of information: 1) Definition of Small Business, 2) Data Points, 3) Financial Institutions Engaged in Business Lending, 4) Access to Credit and Financial Products Offered to Businesses, and 5) Privacy.
Through this RFI, and prior to issuing proposed rules on small business data collection, the CFPB seeks to gain a better understanding of products offered to women-owned, minority-owned, and small businesses as well as the financial institutions offering these products. The RFI notes, “[t]he Bureau is in its early stages with respect to implementing section 1071, and is currently focused on outreach and research to further develop its understanding of the small business lending market, including the institutions, credit products, recording systems, underwriting approaches, distribution channels, and types of applicants in that market.”
The CFPB also released, Key dimensions of the Small Business Lending
Landscape, a white paper reflecting the initial findings of the Bureau’s research and preliminary understanding of the small business lending environment.
The CFPB’s Request for Information is available here.
The CFPB White Paper is available here.