Lawmakers to CFPB: Consider impact of 1071 reporting

House Financial Services Committee Republicans called on the Consumer Financial Protection Bureau to consider the impact on small institutions as it develops a proposed rule on small-business data collection and reporting.

Letter: The joint letter led by Subcommittee on Consumer Protection and Financial Institutions Ranking Member Blaine Luetkemeyer (R-Mo.) cites previous CFPB outreach to small entities and notes the potential for increased regulatory costs on financial institutions and decreased access to credit for small businesses.

Background: Section 1071 of the Dodd-Frank Act requires financial institutions to collect and report certain data on credit applications from women-owned, minority-owned, and small businesses, including the race, sex, and ethnicity of the principal owners.

Deadline: A recent legal settlement with the CFPB determined that the bureau will issue a proposed rulemaking by Sept. 30.

Outline: The CFPB last year issued an outline of proposals for implementing the rulemaking that would exempt community banks with $200 million or less in assets or up to 100 small-business loan originations.

ICBA Comments: In a comment letter, ICBA said the bureau should raise the threshold and exempt certain categories of community banks, such as Community Development Financial Institutions, Minority Depository Institutions, and rural banks.