View Rule

Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) amended the Equal Credit Opportunity Act (ECOA) to require, subject to rules prescribed by the Bureau, financial institutions to report information concerning credit applications made by women-owned, minority-owned, and small businesses. ECOA is a critical law that protects small business owners, including from unlawful discrimination, in their access to and use of credit.  Section 1071 requires that certain data be collected, maintained, and reported to the Bureau, including whether the applicant is a women-owned, minority-owned, or small business; the number of the application and date the application was received; the type and purpose of the loan or credit applied for; the amount of credit applied for and approved; the type of action taken with respect to the application and the date of such action; the census tract of the applicant’s principal place of business; the gross annual revenue of the business; and the race, sex, and ethnicity of the principal owners of the business. Section 1071 also provides authority for the Bureau to require any additional data that the Bureau determines would aid in fulfilling its statutory purposes. The Bureau may adopt exceptions to any requirement of section 1071 and may exempt any financial institution from its requirements, as the Bureau deems necessary or appropriate to carry out section 1071's purposes. The Bureau issued a Request for Information in 2017 seeking public comment on, among other things, the types of credit products offered and the types of data currently collected by lenders in this market, and the potential complexity, cost of, and privacy issues related to, small business data collection. In November 2019, the Bureau hosted a symposium on small business data collection to facilitate its decision-making. In addition, in July 2020, the Bureau released a survey of lenders to obtain estimates of one-time costs lenders of varying sizes would incur to collect and report data pursuant to section 1071. In September 2020, the Bureau released an outline of proposals under consideration and alternatives considered in advance of convening a panel under the Small Business Regulatory Enforcement Fairness Act (SBREFA), in conjunction with the Office of Management and Budget and the Small Business Administration’s Chief Counsel for Advocacy. The SBREFA panel was convened in October 2020 and received feedback from representatives of small entities on the impacts the rules the Bureau is considering to implement section 1071 would have on small entities likely to be directly affected by the rulemaking.  The panel’s report was completed and released in December 2020.  The Bureau’s next step for section 1071 is to release a Notice of Proposed Rulemaking.  Consistent with its statutory purposes, an eventual section 1071 rule will facilitate enforcement of fair lending laws as well as enable communities, governmental entities, and creditors to identify business and community development needs and opportunities of women-owned, minority-owned, and small businesses.