- [01:01] Section 1071 of the Dodd-Frank Act actually amended the Equal Credit Opportunity Act to require financial institutions to collect and submit to the Consumer Financial Protection Bureau certain data regarding applications for credit for small businesses including those that are owned by women and minorities. The law requires CFPB to publish the data annually.
- [01:59] It is really important to keep in mind that this is fair lending regulation, not just a big exercise in data collection. The end game here is extremely important.
- [02:34] It should be used by financial institutions to self-access fair lending performance and help them identify ways to serve their customers better.
- [04:56] According to the CFPB credit unions increased their small business lending from 30 billion dollars in 2008 to over 71 billion dollars in 2021.
- [06:33] The CFPB is telling you that you can use the best information that you have available to you and if you don’t have that information readily available use the fourth quarter of 2023 as a proxy.
- [11:31] The threshold for reporting is now 100 covered transactions in each of the preceding two calendar years. That is up from 25 in the proposal which makes a significant difference, particularly for smaller institutions.
- [12:41] A financial institution must begin collecting data on October 1st, 2024 if it originated at least 25 covered originations in both 2022 and 2023.
- [14:58] Demographic information that needs to be collected relates to the status of a business, race, ethnicity, sex, and gender of the principal owners of the business. The CFPB provided a form that can be used by covered institutions to collect all this information.
- [20:13] Covered institutions are recommended to consider the expanded fair lending and other related compliance risks associated with the CFPB's new small business lending regulation.
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