In a letter to House leaders today, the American Bankers Association urged lawmakers to approve a Senate joint resolution to overturn the CFPB’s final rule implementing Section 1071 of the Dodd-Frank Act, which requires the collection and reporting of credit application data for small businesses. S.J. Res. 32 cleared the Senate in October with bipartisan support. The resolution would need to be approved by both houses of Congress and signed by the president to overturn the CFPB rule.
“While industry fully supports complying with the nation’s fair lending laws, the enormity of the data points to be collected and the 100-loan threshold for determining which lenders must report means compliance with this new rule will place significant burdens on banks, especially community banks,” ABA said. Further, the rule’s definition of a small business as one with gross annual revenues of $5 million or less “expands the rule to cover medium and larger businesses, going beyond what Congress intended,” the association added.
The final rule states that the CFPB has not decided what vehicle it will use to make privacy determinations but does not believe it is legally required to go through a public rule-making procedure to determine whether and how data will be redacted prior to publication, ABA said. “Publication will create privacy concerns for small businesses that do not want their information made public and will not have a say in it,” it said. The association also noted that while Section 1071 applies to nonbanks and banks alike, banks will be regularly examined for compliance and data accuracy while nonbanks won’t face such scrutiny.
