October 21, 2020

CFPB, stakeholders meet on small biz data collection proposals

small businessThe CFPB this week convened representatives serving on its Small Business Regulatory Enforcement Fairness Act (SBREFA) panel to discuss the outline of proposals under consideration for the bureau's implementation of section 1071 of the Dodd-Frank Act, which requires the bureau to collect financial institutions' lending data related to small businesses.

A NAFCU member credit union is serving on the panel, which has allowed the bureau to hear some of the unique perspective of the credit union industry in response to the outline.

The outline of proposals was released last month and explains the scope of proposed rule, various definitions for financial institutions and applications, products covered, potential data points, data privacy considerations, the rulemaking's potential impact on small entities, and the impact on cost and availability of credit to small entities.

While NAFCU has urged the bureau to exempt credit unions from a rulemaking on this issue as it will add significant regulatory burdens on small institutions, the outline of proposals does not include this explicit exemption.

However, other combinations of exemptions are under consideration, including whether to combine size- and activity-based approaches to possible collection and reporting exemptions for financial institutions.

Review the full outline here. The bureau has also provided a high-level summary of the outline, more information about the SBREFA panel process, and additional materials related to the 1071 rulemaking.

Credit unions can learn more about the outline and provide comments to NAFCU about how a section 1071 rulemaking would impact operations through the association's Regulatory Alert until Nov. 20; comments are due to the CFPB Dec. 14. Those chosen to participate on the SBREFA panel have until Nov. 9 to submit their feedback to be included in the next report.

NAFCU will continue work with the CFPB to ensure any final rulemaking does not unnecessarily burden the credit union industry.