A planning tool for covered institutions to support and assess compliance with the Consumer Financial Protection Bureau’s Small Business Lending Rules for Section 1071 of the Dodd-Frank Act (“Section 1071”).
On March 30, 2023, the Consumer Financial Protection Bureau (CFPB) issued a final rule amending Regulation B to implement changes to the Equal Credit Opportunity Act (ECOA) under Section 1071 of the Dodd-Frank Act. Financial institutions covered by this requirement must collect and report to the CFPB data on applications for credit to small businesses, including those that are owned by women or minorities. The rule also addresses privacy interests in connection with the publication of the data; the shielding of certain demographic data; record keeping requirements; enforcement provisions; and effective dates.
The compliance date tiers in the final rule differ depending on the number of covered originations by the covered financial institution in 2022 and 2023. The CFPB issued an interim final rule1 to extend the original effective dates as follows:
Originations
Original collection date
New collection date
Submission Date
Tier 1
Greater than 2,500 small business originations
October 1, 2024
July 18, 2025
June 1, 2026
Tier 2
Between 500 and 2,499 small business originations
April 1, 2025
January 16, 2026
June 1, 2027
Tier 3
Between 100 and 499 small business originations
January 1, 2026
October 18, 2026
The data collection requirements are extensive, creating significant regulatory and IT challenges for lenders. Consequently, many institutions are closely evaluating the impact of this rule across their operation. This planning tool is designed to assist institutions at any stage of their evaluation process.
Recommended approach: Use the grid below to evaluate the impact of the final rule on every part of your organization and identify strengths, gaps, and weaknesses. Consider each point and score your organization’s readiness to comply with the new requirements. The tool can be used in whole or part to better understand where your organization sits today to prepare for compliance. The tool can be completed by anyone in your organization, however, it may be best suited for completion by an individual or group with familiarity on Section 1071 and knowledge of related procedures enterprise-wide.
Next steps: While assessing your data collection capabilities, identifying gaps, and making necessary investments for compliance, consider consulting Wolters Kluwer. Our experts can assist covered institutions in preparing by:
Most importantly, Wolters Kluwer consultants can assist covered institutions in interpreting what your small business and farm lending reveals about your fair lending practices before submitting data to the CFPB. For more information on the Advisory Services related to the final rule, please contact Jason Keller at [email protected] or Thomas Grundy at [email protected].
Please complete the form below and your overall readiness results will be emailed to you.
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