Small Business Data Collection: Share Your Concerns With CFPB

As you know, the CFPB recently issued a proposed rule that would require financial institutions to collect and report data on the credit applications of small businesses.

The Bureau’s rulemaking is required to implement changes to the Equal Credit Opportunity Act (ECOA) made by Section 1071 of the Dodd-Frank Act. The intent of data collection is to facilitate the enforcement of fair lending laws and to enable the identification of business and community development needs and opportunities.

KEY PROVISIONS:

• Covered financial institutions: A financial institution would be required to comply with the data collection if it originated at least 25 “covered credit transactions” to “small businesses” in each of the two preceding calendar years.
• Scope of covered credit transactions: Any transactions that meet the definition of business credit under Regulation B would be considered “covered credit transactions,” including loans, lines of credit, credit cards, and merchant cash advances.
• Data points: Covered entities would be required to collect and report 23 data points to the Bureau. While many of those data points are required by the Dodd-Frank Act, the Bureau has chosen to include several discretionary data points.

The proposed changes result in extensive and recurring costs to comply with these new rules.

Please take a moment to share your voice with the CFPB. Any expanded requirements will only create new significant challenges for credit unions trying to provide financial services to those that need them most. The CFPB needs to hear from credit unions on this.

TAKE ACTION NOW

Thank you for being engaged credit union advocates, and for working so hard to keep your community resilient. All comments are due by Jan. 6.