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CUs: Share feedback on small biz data collection
As the CFPB considers ways to implement small business lending data collection requirements under section 1071 of the Dodd-Frank Act, NAFCU is gathering credit unions' comments on the bureau's recently released outline.
Under section 1071, the CFPB is required to collect financial institutions' lending data related to small businesses. 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 an explicit exemption.
Through a new Regulatory Alert, NAFCU highlights that under the outline, the CFPB is considering:
- limiting the extent of reporting by only requiring information about small businesses, including those that are women-owned or minority-owned;
- limiting the range of reportable credit products by excluding consumer credit used for business purposes, leases, trade credit, factoring, and MCAs; and
- whether asset or transaction-based thresholds may be appropriate measures to exempt certain financial institutions from coverage under a future 1071 rule.
NAFCU highlights that the outline is not a formal proposal, but serves as a starting point for "engaging small entity representatives through the consultative process required under the SBREFA."
Nevertheless, credit unions currently engaged in small business lending should review the outline carefully as it lays the groundwork for data collection requirements that are likely to produce significant and lasting compliance costs.
The association is seeking credit union feedback on:
- how implementation of section 1071 will impact the affordability or availability of business products at a credit union; and
- how a credit union would plan to manage the cost of section 1071 compliance, assuming only the 16 statutorily mandatory data points are collected.
View detailed background information and insights on the SBREFA outline in NAFCU's Regulatory Alert. Comments are due to NAFCU Nov. 20; comments are due to the CFPB Dec. 14.
NAFCU's October Economic & Credit Union Monitor survey is also focused on small business data collection; responses are due Oct. 20.