In remarks before a public symposium on small business loan data collection today, Consumer Financial Protection Bureau Director Kathleen Kraninger signaled the importance of balancing the statutory objectives of Section 1071 of the Dodd-Frank Act with the need to avoid negative credit effects on the $1.4 trillion small business lending market.
“We know the rule needs to be done with care and consideration in order that the rule not impede the ability of small businesses, including women- and minority-owned small businesses, to access the credit they need,” Kraninger explained. “Today’s symposium explores how to efficiently collect appropriate data without imposing unnecessary or undue cost that could limit access to credit from existing market participants or discourage new entrants into the market for small business credit.”
The symposium included several presentations on the current state of small business lending and the challenges of implementing Section 1071, which calls for the bureau to collect data on women-owned, minority-owned or small businesses and is one of the last remaining rules required by Dodd-Frank. According to the CFPB’s most recent regulatory agenda, the agency will resume pre-rulemaking activities early in 2020.
Maureen Busch, CRCM—VP and compliance/CRA officer at the Bank of Tampa in Florida and a member of the CFPB’s Community Bank Advisory Council—cautioned against creating overlapping data incompatible with small business data already reported by banks, including for the Community Reinvestment Act, beneficial ownership requirements and the Home Mortgage Disclosure Act. Several panelists addressed challenges of defining small businesses, small business loans, principal business owners and other key terms in Section 1071.