Republicans in the House and Senate have introduced legislation to repeal Section 1071 of the Dodd-Frank Act, which requires financial institutions to report data on small-business lending.
The companion bills sponsored in the House by Rep. Roger Williams (R-Texas) and in the Senate by Sen. John Kennedy (R-La.) would eliminate the requirement. The sponsors said Section 1071 imposed increased compliance costs on financial institutions, potentially reducing access to credit for small businesses.
Congress last year passed a Senate joint resolution sponsored by Kennedy to overturn the Consumer Financial Protection Bureau’s rule implementing Section 1071, with the resolution receiving bipartisan support. Former President Biden vetoed it.
The American Bankers Association in 2022 joined a lawsuit filed by the Texas Bankers Association and the McAllen, Texas-based Rio Bank in challenging the CFPB rule in court, which led to its compliance deadline being delayed until July of this year for Tier 1 institutions and 2026 for Tier 2 and Tier 3 institutions. The Trump administration has not indicated whether it will overturn the rule, although Treasury Secretary Scott Bessent—who is also CFPB acting director—has ordered the bureau to pause all regulatory activities.
During testimony yesterday before the House Financial Services Committee, ABA Vice Chair Cathy Owen said Section 1071’s publishing requirements on small-business lending raise serious privacy concerns.
“We’re very concerned about the release of private information into the marketplace and what it could mean for those individuals,” Owen told lawmakers. “As I said before, it is not going to be difficult to determine whether or not someone was approved or denied a loan, especially in a small community where there are only so many businesses, especially of a particular industry.”
