CFPB settlement sets Sept. 30 deadline for 1071 proposal

A lawsuit on the Consumer Financial Protection Bureau’s implementation of small-business data collection and reporting rules determined that the bureau will issue a proposed rulemaking by Sept. 30, 2021, according to the Ballard Spahr law firm.

Background: Section 1071 of the Dodd-Frank Act requires financial institutions to collect and report certain data on credit applications from women-owned, minority-owned, and small businesses, including the race, sex, and ethnicity of the principal owners.

Lawsuit: With the California Reinvestment Coalition, et al, lawsuit alleging that the CFPB has wrongfully delayed adoption of regulations to implement the provisions, the agreement appears to provide a hard deadline on the rulemaking.

Outline: The CFPB last year issued an outline of proposals for implementing the rulemaking that would exempt community banks with $200 million or less in assets or up to 100 small-business loan originations.

ICBA Comments: In a December comment letter, ICBA said the bureau should raise the threshold and exempt certain categories of community banks, such as Community Development Financial Institutions, Minority Depository Institutions, and rural banks.