Lawmakers Seek Additional Public Comment Options for CFPB’s Section 1071 Data Collection Proposal

Advocacy Resource CenterLegislation would curb burdens for small businesses, including increased costs and privacy concerns, under bureau’s proposed rule on small business lending data collection through Section 1071 of the Dodd-Frank Act.

02/28/2022 4:00 P.M.

3 minute read

Several lawmakers have proposed legislation that would require the Consumer Financial Protection Bureau to conduct additional rulemaking processes for its proposed rule on small business lending data collection under the Equal Credit Opportunity Act (ECOA).

The Bank Loan Privacy Act, sponsored by U.S. Reps. Blaine Luetkemeyer, R-Mo., French Hill, R-Ark., and Roger Williams, R-Texas, is a three-bill package to protect American small businesses and financial institutions from “costly and invasive data collection and compliance standards,” according to a news release from Luetkemeyer’s office.

In September 2021, the CFPB issued a proposed rule amending Regulation B to implement changes to the ECOA made by Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Consistent with Section 1071, the proposal would require covered financial institutions to collect and report to the bureau data on applications for credit for small businesses, including those that are owned by women or minorities, according to the CFPB. The bureau’s proposal also addresses its approach to privacy interests and the publication of Section 1071 data; shielding certain demographic data from underwriters and other persons; recordkeeping requirements; enforcement provisions; and the proposed rule’s effective and compliance dates.

Comments on the proposal closed Jan. 6 and the bureau’s semiannual regulatory agenda states the next step is to review and consider the comments.

In a letter to CFPB Director Rohit Chopra, Luetkemeyer, Williams and Hill also addressed the rulemaking under Section 1071 of the Dodd-Frank Act and the need for additional public comment.

“Since the CFPB issued the proposed rule, we have heard numerous concerns from industry stakeholders, including financial institutions of various sizes and categories, and a wide range of small businesses regarding the specific makeup of the rule,” the letter states. “In addition, the CFPB received more than 2,000 comment letters in response to the rulemaking highlighting specific issues regarding implementation, over burdensome requirements, privacy concerns, the rulemaking process, and small business access to credit. We urge you to take action to remedy these issues within the final rulemaking.”

The letter also notes that “the Small Business Advisory Review Panel for the CFPB’s 1071 rulemaking outlined many concerns about the impact this rule could have on small financial institutions, including how increasing costs and burdens associated with small-business loans can negatively impact access to credit for small businesses.”

The CFPB should exclude as many small financial firms as possible from the data collection process in order to alleviate this burden and provide additional time than the proposed 18-month implementation period following the issuance of a final rule, the lawmakers say.

The complete text of Bank Loan Privacy Act can be found here.

CFPB Request for Information on ‘Junk Fees’

Meanwhile, the CFPB is seeking comments from the public and businesses related to fees that are not subject to competitive processes that ensure fair pricing through March 31.

The public comments will serve to assist the CFPB and policymakers in exercising its enforcement, supervision, regulation and other authorities to create fairer, more transparent and competitive consumer financial markets, according to the request for information (RFI).

ACA International is reviewing the RFI to submit comments to the bureau on the accounts receivable management industry’s behalf. Please send questions or information to Leah Dempsey, Vice President and Senior Counsel, at [email protected]. Read more about the RFI in coverage from ACA here.

If you have executive leadership updates or other member news to share with ACA, contact our communications department at [email protected]. View our publications page for more information and our news submission guidelines here.

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