American Banker, January 11, 2022, Lenders urge CFPB to scale back small-business data collection plan
A proposal to collect data on the race, ethnicity and gender of small-business borrowers has drawn nearly 1,700 comments to the Consumer Financial Protection Bureau, with many of them expanding on the criticism that had been building since it was unveiled in September.
Many community bankers and credit union executives said the rule would make it harder for small financial institutions to compete, forcing some to exit small-business lending entirely. Others said aspects of the data collection were at odds with how many banks do business.
In comment letter after comment letter, bankers urged the CFPB to throttle back its proposal, essentially trying to chip away at the number of institutions that would be required to report.
Financial institutions that originate at least 25 small-business loans a year for two consecutive years would have to collect and report the data. Some bankers asked that the threshold be raised to 500 or 1,000 loans a year.
A minimum of 13 specific data points would be collected. Dodd-Frank gave the CFPB the authority to expand the data even further. Consumer groups want more data added. For example, the National Community Reinvestment Coalition urged the bureau to collect the annual percentage rate on small-business loans and credit scores from small-business loan applicants.
