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CFPB Releases Section 1071 Small Business Lending Final Rule; League Remains Concerned About Scope of Rule, Regulatory Burden

Authored By: Lewis Wood on 3/30/2023

The Consumer Financial Protection Bureau (CFPB) released its final rule on section 1071 of the Dodd-Frank Act Thursday, which would require credit unions to collect and report certain data on applications for credit. While your League recognizes that this rule was mandated by Congress, we urged the CFPB as it crafted the final rule to carefully consider how the scope of its rule might impact the cost of small business borrowing and how burdensome data collection required by the rule would affect smaller financial institutions, like credit unions. We also noted the potential privacy concerns related to the public release of this data.

The CFPB's final rule does include several changes from the Bureau's proposed rule, including increasing the threshold for a covered financial institution to 100 (up from 25), adopting a phased implementation, and removing the visual observation requirement.

“We support the CFPB fulfilling its statutory mandate in issuing this rule, but we continue to seek a final rule that represents the least possible burden to credit unions. Our concerns remain that the scope of the rule and the regulatory burden it represents might well disincentivize some credit unions from offering small business lending, depriving small businesses of an important source of credit for fueling growth and creating jobs," notes Virginia Credit Union League President/CEO Carrie Hunt. "Credit unions have a strong history of small business lending and have demonstrated that with existing reporting and data."

Related: League Comments on CFPB's Small Biz Data Collection Proposal
Related: CFPB Issues Proposal to Collect Small Business Data; League Seeks Member Feedback
Related: Small Business Data Collection: Share Your Concerns With CFPB
Related: Reminder: Comments Due Jan. 6 on CFPB Small Business Lending Data Collection Proposal
Related: CUNA files FOIA request with CFPB over section 1071 implementation
Related: CUNA Backs Section 1071 Reform Legislation

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