Following announcement at Caucus, CFPB details proposals for small biz data collection
The CFPB Tuesday released its Small Business Regulatory Enforcement Fairness Act (SBREFA) outline of proposals related to Section 1071 of the Dodd-Frank Act, which bureau Director Kathy Kraninger had announced during her Q&A Monday at NAFCU's Congressional Caucus.
Section 1071 requires the bureau to collect financial institutions' lending data related to small businesses. The outline of proposals 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.
"Under a combined approach, [a financial institution] would be required to collect and report 1071 data if it exceeds either a given annual number of small business loans originated or annual total dollar value of small business loans originated during the relevant time period," the outline states. "However, [depository institutions] with assets under a given asset threshold would be exempt from reporting, regardless of the number or dollar value of small business loans they originated during the relevant time period."
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.
Public comments on the outline can be submitted through 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.
In a status update released in June, the bureau said the coronavirus pandemic could impact its 1071 rulemaking process. The bureau will next convene the SBREFA panel, which includes credit union representatives.