“We applaud the CFPB for addressing serious flaws in its previous Section 1071 rulemaking, which exceeded the Bureau’s legal authority and constrained banks’ ability to make small business loans that are so essential to economic growth. This is one of many recent regulatory reforms advanced by the CFPB that will unleash America’s banks, allowing them to better serve their customers and communities while avoiding excessive compliance costs. While we welcome these important changes to the rulemaking, we also continue to urge Congress to fully repeal Section 1071 so that banks of all sizes can remain focused on providing credit to small businesses.”
Additional background:
The CFPB released a final rule in 2023 to implement Section 1071 of the Dodd-Frank Act, which requires financial institutions to report data on small-business lending. ABA joined with the Texas Bankers Association and Rio Bank in challenging the rule in federal court, which resulted in a stay of the mandatory compliance dates for members of the associations pending the outcome of the case. In an interim final rule issued this summer, the CFPB extended the compliance dates one year and committed to revising the rule.