In a letter today, the American Bankers Association said it is pleased with the Consumer Financial Protection Bureau’s proposal to revise its small-business lending data rule and offered several recommendations to reduce the compliance burden for banks.
The CFPB released a final rule in 2023 to implement Section 1071 of the Dodd-Frank Act, which requires financial institutions to report data on small-business lending. However, the bureau’s current leadership has deemphasized enforcement of the rule and pledged to issue new rulemaking in response to the lawsuits brought by ABA, the Texas Bankers Association and others. It also pushed back the rule’s compliance dates by roughly a year.
Among other things, ABA said the CFPB should review and revise its analysis on the economic costs of the rule, as the bureau’s previous leadership acknowledged that lenders would pass the costs on to small businesses but “refused to quantify the costs or meaningfully adjust its costs estimates.” The association also said the CFPB could make several changes to reduce the cost of data collection for banks, including exempting more small banks, defining a small business as having $1 million or less in gross annual revenue and requiring financial institutions to collect only the 13 data points mandated by Congress in Section 1071.
