The Consumer Financial Protection Bureau (CFPB or Bureau) agreed to a March 31, 2023 deadline to issue a final rule under Section 1071 of Dodd-Frank. Section 1071 amended the Equal Credit Opportunity Act (ECOA) to impose significant data collection requirements on small business creditors. The CFPB accepted the deadline as part of a previously agreed litigation settlement regarding alleged delays in the rulemaking process. The court accepted the deadline and maintained jurisdiction over the matter to oversee compliance with the settlement and to address any potential requests for modification.
In September 2021, the CFPB issued a proposed rule to implement Section 1071 with more than 900 pages of supplementary material. The Bureau also issued a summary of the proposed rule and a chart of the data points that the rule requires creditors to collect, and it accepted approximately 2,100 comments on the proposal in January 2022.
Since the end of the comment period, several Republican congressmen sent a letter to Director Chopra, highlighting several “issues of particular concern.” Those concerns included seeking:
- An expansion of the de minimis exemption from compliance, which is proposed to be only 25 covered credit transactions;
- A longer implementation period than the proposed 18-month period;
- Elimination of a requirement for a financial institution to “collect at least one principal owner’s race and ethnicity (but not sex via visual observation or surname)” where the applicant chooses not to submit information on race, gender, or ethnicity;
- Clarity on what collected data will be made public before the data is collected.
Until the CFPB issues its final rule, it is unclear whether there will be any changes to the proposed rule.