(Oct. 8, 2021) A summary of a proposal by the CFPB to collect business loan data from lenders has been published and posted by NASCUS. Comments on the proposal are due on or before Jan. 6.
The summary is available to members only.
The proposal was issued early last month (Sept. 1) and is aimed, according to the bureau, at “helping regulators and the public better understand the business lending market.”
The proposal would require lenders to disclose information about their lending to small businesses. According to the bureau, lenders would be required to report the amount and type of small business credit applied for and extended, demographic information about small business credit applicants, and key elements of the price of the credit offered.
That information would allow it to learn, the agency said, how small enterprises fare when trying to access financing, and what barriers are holding them back from further prosperity.
CFPB noted the rule was mandated by the legislation which created the bureau, the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).
In comments to the press Sept. 1, CFPB then-Acting Director Dave Uejio said the bureau and the public don’t know enough about whether small businesses have fair access to the capital they need to generate new jobs and grow the economy.
LINKS:
NASCUS Summary: CFPB September 2021 Proposal Regarding Small Business Lending Data Collection
CFPB Proposes Rule to Shine New Light on Small Businesses’ Access to Credit
(Sept. 10, 2021) Helping regulators and the public better understand the business lending market is the stated aim of a new rule unveiled Sept. 1 by CFPB, according to its acting director.
The proposed rule would require lenders to disclose information about their lending to small businesses. According to the bureau, lenders would be required to report the amount and type of small business credit applied for and extended, demographic information about small business credit applicants, and key elements of the price of the credit offered.
That information would allow it to learn, the agency said, how small enterprises fare when trying to access financing, and what barriers are holding them back from further prosperity.
CFPB noted the rule was mandated by the legislation which created the bureau, the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).
In comments to the press Sept. 1, CFPB Acting Director Dave Uejio said the bureau and the public don’t know enough about whether small businesses have fair access to the capital they need to generate new jobs and grow the economy.
“As we saw all too recently in the original design and implementation of the Paycheck Protection Program (PPP, established to help businesses keep paying their workers during the coronavirus crisis), we need to know much more about the credit needs of small businesses if we are to support them adequately in times of crisis and day-to-day,” Uejio said. “Our rule, if finalized, will shed much-needed light on the credit needs of small businesses, and it will help unleash the true potential of our nation’s entrepreneurs.”
Under the proposal – issued with a 90-day comment period, with no extension anticipated, the agency stated – lenders would be required to collect and report data about credit applications from small businesses, including women-owned and minority-owned small businesses. The bureau said the proposed reporting requirements would apply to a wide range of credit products, including term loans, lines of credit, credit cards, and merchant cash advances.
The agency said it would publish “application-level” data collected under the rule, but would modify or withhold data from public disclosure “based on an assessment of the risks to privacy interests and the benefits of publication.”
LINK:
CFPB Proposes Rule to Shine New Light on Small Businesses’ Access to Credit
Remarks of Acting Director Dave Uejio at the Press Call on the Small Business Lending Proposed Rule
(June 18, 2021) Collection, reporting, and public disclosure of data concerning credit applications made by women-owned, minority-owned, and small businesses will be the subject of a proposed rule by the CFPB later this summer, according to the agency’s spring 2021 agenda, published late last week.
This proposal and others to come are reviewed in a blog post by the bureau published on the agency’s website about its regulatory agenda, which is part of the “unified agenda” of rules across federal agencies and departments (including NCUA).
The small-business data proposal is planned for release in September, according to the agenda, and follows the outline of proposals issued about a year ago and a stakeholder panel report in December. The proposed rule would implement a section 1071 requirement in the Dodd-Frank Act requirement.
The blog post also hints that the bureau’s permanent director (nominee Rohit Chopra, who now sits on of the Federal Trade Commission) will be confirmed by the Senate in the coming months; it states that the permanent director’s changes to the current agenda will be reflected in the fall 2021 agenda.
Other rules ahead for the CFPB, according to the regulatory agenda, include:
- action on rulemaking over availability of consumer financial account data (the bureau is considering comments it has already received and assessing “next steps”).
- A final rule intended to facilitate the transition away from the LIBOR reference rate, which becomes defunct for new contracts in January. The bureau said it intends to release its final rule that same month. “Our work is designed to lessen the financial impact to consumers and facilitate creditor compliance by providing examples of replacement indices that meet Regulation Z requirements,” the bureau wrote in the blog post.
- Assessments of a rule implementing HMDA, which became effective in 2018. The bureau noted that, considering other rulemaking priorities, it is no longer pursuing two HMDA rulemakings that were listed in the proposed rule stage in previous agendas – one addressing the data points that lenders must report and another related to the public disclosure of HMDA data.