As promised (and discussed here), the Consumer Financial Protection Bureau (CFPB) issued its final rule under Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Final Rule). Section 1071 amended the Equal Credit Opportunity Act (ECOA) to impose significant data collection requirements on small business creditors. According to the press release announcing the Final Rule’s issuance, “[l]enders will collect and report information about the small business credit applications they receive, including geographic and demographic data, lending decisions, and the price of credit.”

Positive developments in the Final Rule include:

  • The CFPB’s decision to increase the number of small business loans that lenders need to make each year to be covered under the Final Rule from 25 to 100 in each of the preceding two years.
  • The CFPB’s phased approach to compliance. The Final Rule requires lenders that originate at least 2,500 small business loans annually to collect data starting October 1, 2024. Lenders that originate at least 500 loans annually must collect data starting April 1, 2025. Lenders that originate at least 100 loans annually must collect data starting January 1, 2026.
  • The CFPB eliminated the requirement in the proposed rule that, for in-person applications, the lender make a “guess” as to principal owners’ race/ethnicity based on visual appearance and last name.

In the enforcement policy statement issued concurrently with the Final Rule, the CFPB stated it “intends to use its enforcement and supervisory authorities to focus on covered lenders’ compliance with these requirements relating to the [Final Rule’s] prohibition against discouraging applicants from submitting responsive information.” Specifically, the CFPB “intends to pay attention to covered lenders’ response rates for data requested from applicants.” This will be an important element for lenders to keep in mind as they design both their information gathering process and in their compliance monitoring, once data collection begins.

Troutman Pepper’s Consumer Financial Services team will be digesting the 888-page Final Rule and issuing further analysis through its blog and podcast over the coming weeks.

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Photo of Stefanie Jackman Stefanie Jackman

Stefanie takes a holistic approach to working with clients both through compliance counseling and assessment relating to consumer products and services, as well as serving as a zealous advocate in government inquiries, investigations, and consumer litigation.

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Josh focuses his practice on federal and state consumer and business lending and payments laws, including those that apply to credit cards, installment loans, lines of credit, and point-of-sale finance.

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Caleb is counsel in the firm’s Consumer Financial Services Practice Group. He focuses his practice on helping federal and state-chartered banks, fintech companies, finance companies, and licensed lenders navigate regulatory risks posed by state and federal laws aimed at protecting consumers and small…

Caleb is counsel in the firm’s Consumer Financial Services Practice Group. He focuses his practice on helping federal and state-chartered banks, fintech companies, finance companies, and licensed lenders navigate regulatory risks posed by state and federal laws aimed at protecting consumers and small businesses in the credit and alternative finance products industry.

Photo of Lori Sommerfield Lori Sommerfield

With over two decades of consumer financial services experience in federal government, in-house, and private practice settings, and a specialty in fair lending regulatory compliance, Lori counsels clients in supervisory issues, examinations, investigations, and enforcement actions.

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James is the co-leader of the firm’s Financial Services Industry Group. He has significant experience working with clients across the entire financial services sector, regularly working with public and private companies such as banks, neobanks, marketplace lenders, and other fintech and financial services…

James is the co-leader of the firm’s Financial Services Industry Group. He has significant experience working with clients across the entire financial services sector, regularly working with public and private companies such as banks, neobanks, marketplace lenders, and other fintech and financial services providers and partners.

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Chris is the co-leader of the Consumer Financial Services Regulatory practice at the firm. He advises financial services institutions facing state and federal government investigations and examinations, counseling them on compliance issues including UDAP/UDAAP, credit reporting, debt collection, and fair lending, and defending…

Chris is the co-leader of the Consumer Financial Services Regulatory practice at the firm. He advises financial services institutions facing state and federal government investigations and examinations, counseling them on compliance issues including UDAP/UDAAP, credit reporting, debt collection, and fair lending, and defending them in individual and class action lawsuits brought by consumers and enforcement actions brought by government agencies.