CFPB Finalizes Revised Section 1071 Rule

The Consumer Financial Protection Bureau finalized a revised Section 1071 rule May 1 governing small business lending data collection, significantly narrowing the scope of the original 2023 rule. Established under the Dodd-Frank Act, Section 1071 requires certain financial institutions to collect and report data on small business loan applications to promote transparency and identify potential gaps in access to credit.

In 2023, Cornerstone League played a significant role in fight back against the onerous provisions in the original version by joining with then-CUNA (now America’s Credit Unions) and Rally Credit Union in litigation. In its original form, the 2023 rule applied to institutions making as few as 100 covered small business loans annually and required extensive data collection across a wide range of fields, creating operational and compliance challenges.

The updated framework reflects a more targeted approach and reduces compliance burden for many credit unions. By narrowing the scope, the rule allows institutions to remain focused on delivering affordable, accessible financial services to small business members. The revised rule raises the threshold to institutions originating 1,000 or more covered small business loans in each of the two preceding calendar years, reduces the number of required data points, and establishes a single compliance date of Jan. 1, 2028.

While the rule continues to support transparency in small business lending, the revisions move toward a more streamlined and workable framework for credit unions.