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CU feedback on section 1071 proposed rule due Jan. 6
NAFCU late September sent out a Regulatory Alert to members breaking down the CFPB’s proposed rule to implement changes made by section 1071 of the Dodd-Frank Act. Through the Regulatory Alert, the association is seeking member-credit union feedback on the proposal. The Bureau announced that comments on the proposed rule must be submitted on or prior to Jan. 6, 2022.
The Dodd-Frank’s section 1071 amended the Equal Credit Opportunity Act (ECOA) to require the collection and submission of credit application data related to women or minority-owned businesses and small businesses.
NAFCU has asked for credit union feedback on the proposed rule which would require credit unions and credit union service organizations (CUSOs) that originated at least 25 covered small business credit transactions in each of the two preceding calendar years to collect and report certain small business credit application data, including data related to the ethnicity, race, and sex of business applicants’ principal owners.
The Regulatory Alert highlights that the Bureau is seeking approval from the Small Business Administration (SBA) to define a “small business” as any business that had five million or less in gross annual revenue in its previous fiscal year. It also details how the proposed rule impacts credit unions and questions for credit unions to consider when providing feedback.
The association has repeatedly advocated for the exclusion of credit unions from any burdensome rulemaking requiring financial institutions to collect and report data related to small business lending, noting the constraints credit unions face associated with the implementation of the data collection.
Comments are due to the CFPB on or before Jan. 6, 2022; credit unions are encouraged to submit comments to NAFCU through the alert. Subscribe to receive Regulatory Alerts.