As the CFPB looks to implement Section 1071 of the Dodd-Frank Act—which calls for the collection of small business lending data—Rep. Nydia Velazquez (D-N.Y.) this week introduced H.R. 7351, an American Bankers Association-advocated bill that would amend the Consumer Protection Act to give the CFPB supervisory authority over nonbanks making small business loans. Currently, the bureau has the authority to enforce fair lending laws against nonbanks, with the Federal Trade Commission having secondary enforcement authority, however, these agencies do not have supervisory authority over nonbank small business lenders.
ABA has previously raised concerns that without supervisory authority, nonbanks may submit Section 1071 data with errors that are not detectable without a formal examination, which could make the 1071 data set less reliable for regulators and the public.
