To prepare for these deadlines, lenders may begin gathering the otherwise protected demographic information one year before their official collection deadline. This head start can help institutions ensure timely compliance and address any challenges in advance. Key Data Points Under 1071 Small Business Lending Data Regulations Banks, credit unions and other creditors will need to collect more than 20 pieces of data for each application and report this data to the CFPB each year. The data points cover a wide range of details related to the credit transaction, the business’ attributes and demographic data. Some of the key 1071 data points required include: 1. Application date and method (in person, telephone, online, mail). 2. Credit type, including the product type (term loan, line, credit card, etc.), guarantee type (personal, SBA, USDA, etc.) and loan term (in months). 3. Purpose of the credit (e.g., purchase, working capital, construction, etc.). 4. Amount applied for. 5. Action taken on the application (originated, denied, withdrawn, etc.) and date of action. 6. Amount approved or originated. 7. Denial reasons (e.g., business characteristics, cash flow, collateral). 8. Pricing details (interest rate, origination charges, broker fees, initial annual charges, additional cost for merchant cash advances and prepayment penalties). 9. Census tract number. This information should represent the address where loan proceeds will be applied, the address of the applicant’s headquarters or main office, or another address associated with the applicant. 10. Gross annual revenue. Financial institutions may reuse previously collected gross annual revenue figures when the data was collected within the same calendar years as the covered application. 11. NAICS code. 12. Number of workers and time in business. 13. Business ownership status (such as minority, women, LGBTQI+). 14. Number of principal owners and ethnicity, race and sex/gender of principal owners 1-4. This data must be reported based only on information provided by the applicant (i.e., no reporting based on visual observation). Importantly, the CFPB mandates that lender data collection processes shouldn’t discourage applicants from providing their demographic information. Financial institutions will want to make data collection processes as easy as possible for applicants to encourage participation. Tips for Organizing and Streamlining Data Collection Processes Given the scope of effort needed to collect and report data by the CFPB deadlines, some financial institutions are already taking action. In fact, if you are a tier 1 lender and have to comply beginning July 1, 2025, we recommend beginning your testing now to give you at least nine months of testing. For those who may feel overwhelmed by the tasks ahead, the following steps can help organize and streamline the data collection process: 1. Understand the rule and related requirements. Make sure others involved in lending are familiar with the 1071 small business lending data regulations and the specific requirements for CFPB small business data collection. 2. Review existing data collection practices. Identify what data is already being collected and where gaps exist. Some data may be available within the financial institution’s systems, while other data points will need to be obtained from applicants. 3. Assess current systems used for data collection and reporting. Determine whether these can be leveraged for 1071 data collection and whether new or updated systems are needed. 4. Assess the current lending process (i.e., how information is gathered). This assessment likely will require reviewing the institution’s credit culture if certain required data points are missing from the current application process. Technological Solutions for Efficient 1071 Data Collection Automation can play a critical role in streamlining CFPB small business data collection. Software solutions designed for data collection and analysis can help lenders focus on the borrowers and winning deals while ensuring compliance with the 1071 small business lending data regulations. These tools can also make it easier to review and submit the information to the CFPB efficiently. Abrigo’s product team worked with the CFPB throughout the rulemaking process and has built 1071 compliance into its loan origination platform and its small business loan origination software. While ease of data access is important, in general, if the institution doesn’t employ the firewall exception, CFPB prohibits underwriters or any employee responsible for the disposition or “making a determination” on an application from accessing certain demographic data. Abrigo’s software 7 Colorado Banker
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