O CFPB’s Small Business Lending Data Collection Rule INCREASES Operational Burdens and Regulatory Risk for Lending to Small Businesses By Michael Flynn1 and Brett Voets,2 Buchalter APC On March 30, 2023, the Consumer Financial Protection Bureau (CFPB) issued the long-awaited final version of its rules on Small Business Lending under the Equal Credit Opportunity Act.3 The new rule imposes significant burdens and risks on lenders and will likely result in significant amounts of loan-related data being made public, as discussed below. The lenders and loans/applications covered include: • Any financial institution that made over 100 covered loans in each of the previous two calendar years has data collection and reporting requirements in regard to covered small business loans. Covered small business loans are business or commercial loans to any company that grossed $5 million or less in revenue in its previous fiscal year. Thus, the rule has a broad application, covering a wide scope of lenders and loans. The full text of the CFPB’s Small Business Lending Data Collection Rule can be found by scanning the QR code. https://www.consumerfinance.gov/rules-policy/final-rules/small-business-lending-under-theequal-credit-opportunity-act-regulation-b/ The rule will implement the small business lending data collection requirements created by Section 1071 of the Dodd-Frank Act by amending Regulation B4 of the Equal Credit Opportunity Act (ECOA).5 The CFPB derives its rulemaking authority from both Section 1071 and the ECOA.6 The CFPB has indicated that the primary purposes of this rule are to facilitate the enforcement of fair lending laws created by the Dodd-Frank Act and to create a database available to the public that can be used to more effectively identify business and community development needs and serve women-owned, minority-owned and LGBTQ+-owned small businesses. Colorado Banker 6
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