Bill would establish ‘appropriate compliance timeline’ for section 1071

CUNA wrote in support of legislation to establish an “appropriate” compliance timeline for the Consumer Financial Protection Bureau’s (CFPB) section 1071 rulemaking. The Small Lenders Exempt from New Data and Excessive Reporting (LENDER) Act was introduced by Rep. French Hill, R-Ark.

Section 1071 requires financial institutions to compile, maintain, and submit to the CFPB certain data on applications for credit for women-owned, minority-owned, and small businesses.

CUNA notes that credit unions support the goals of section 1071 but have concerns with the 1071 rulemaking.

“There is widespread concern that Section 1071’s complexity and significant costs will weigh disproportionately on credit unions in ways that ultimately lead to fewer and less favorable outcomes for all small business borrowers,” the letter reads. “The overly broad scope of the CFPB’s proposed rule will substantially raise the cost of small business borrowing and require covered financial institutions to collect data on businesses that are not ‘small businesses’ by any traditional metric.


continue reading »