Small biz data collection plan could be impacted by COVID-19, says CFPB
The CFPB provided a status update to the California federal district court on its efforts to implement Section 1071 of the Dodd-Frank Act requiring financial institutions to collect and report on data related to small business lending. The report is part of the bureau's stipulated settlement agreement in a lawsuit brought by the California Reinvestment Coalition, National Association for Latino Community Asset Builders, and two individual small business owners.
The lawsuit filed last year claims the bureau has violated the law by not yet issuing regulations to implement Section 1071. The bureau sought summary judgement as it outlined its rulemaking plan indicating when the Small Business Regulatory Enforcement Fairness Act (SBREFA) process would begin and provide plans.
The settlement agreement requires the bureau to release a SBREFA outline of proposals and alternatives considered by Sept. 15, 2020, and to convene a SBREFA panel by Oct. 15, 2020, or as soon as is practicable.
In its status report, the bureau said:
- staff have begun drafting sections of the SBREFA outline and preliminary internal work on selecting small entity representatives who will consult with the SBREFA panel;
- it has postponed, as announced in March due to the coronavirus, the planned survey of lenders to estimate the one-time costs incurred by the small business lending data collection, though the bureau believes the SBREFA process can continue without these results if necessary;
- the coronavirus pandemic may "introduce uncertainty with respect to the bureau's future ability to meet these deadlines" related to the SBREFA outline and panel as it must coordinate with the Small Business Administration and Office of Management and Budget, though the bureau believes it is still on track to do so;
- the pandemic might impact the bureau's ability to recruit small entity representatives to participate in the SBREFA process; and
- it will notify plaintiffs of the lawsuit if an extension of SBREFA deadlines is warranted.
The bureau in November held a symposium on small business data collection, during which small businesses and financial institutions shared concerns about added regulatory burdens under a potential rule. NAFCU has also urged the bureau to exempt credit unions from a future rulemaking and will keep credit unions updated on the process.
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