Joint Comment Letter From NCRC And 49 Organizations On The CFPB’s Proposal To Implement Small Business Lending Data Collection Requirements


Comment Intake
Consumer Financial Protection Bureau
1700 G Street, NW
Washington, DC 20552

Re: Comments on the CFPB Outline of Proposals Under Consideration and Alternatives Considered for Section 1071

Dear Director Kraninger:

Thank you for the opportunity to comment on the Consumer Financial Protection Bureau’s (the Bureau) outline of proposals under consideration and alternatives considered for Section 1071.

In October, the Bureau released an outline of proposals under consideration for the implementation of Section 1071 of the Dodd-Frank Act. This section amends the Equal Credit Opportunity Act (ECOA) to expressly permit and require lenders to collect information on the race, ethnicity and gender of a small business owner during the application for small business credit and to publicly report on the action taken on the application.

These proposals are the result of over ten years of deliberation, debate, research and policy analysis. They also arrive during a global economic and public crisis that has dramatically and negatively impacted small businesses and overwhelmingly harmed the financial stability and the solvency of Black businesses, Latino businesses, businesses owned by people of color, and women-owned businesses. The effects of this crisis will impact wealth creation opportunities for years to come, and coordinated federal and state action is necessary to both protect small businesses that remain open and to invest in the communities and the entrepreneurs whose wealth and livelihoods have been impacted. Data transparency alone will not achieve these goals, but it is a critical step among many to ensure that the recovery and future investment are equitable.

We believe that in many aspects, the Bureau has taken the correct approach in evaluating the efficacy of the data collection options available. However, the Bureau has also considered a number of options that will result in data collection gaps that, if adopted, will result in an incomplete picture of the small business market, limit the ability to conduct fair lending testing, and make it more difficult to ensure that lenders are meeting the credit needs of small businesses.

The following comments in response to the questions proposed in the Small Business Regulatory Enforcement Fairness Act (SBREFA) outline provide an overview of how these limitations can be addressed. To this end, we urge the Bureau to:

A)    Provide a market-wide view of small business lending activity. Only a broad rule that applies to all small business lenders covers all forms of small business credit and includes all forms of small businesses can provide the necessary market-wide view of the small business lending activity necessary to identify lending trends and harmful practices before they become widespread.

  1. Broadly define financial institution and ensure that all market participants are required to report. The statutory language of Section 1071 was rightfully designed to ensure market-wide coverage and reporting from the wide variety of institutions that provide credit to small businesses, including banks, credit unions, online lenders and other lenders. Section 1071 defines a lender as “any partnership, company, corporation, association (incorporated or unincorporated), trust, estate, cooperative organization or other entity that engages in any financial activity.” This definition would include depository institutions like banks and credit unions and non-depository institutions such as financial technology companies.
  2. Require lenders making 25 loans or more annually to report. We urge the Bureau to provide an activity exemption of less than 25 loans annually, consistent with the 2015 HMDA final rule amending Regulation C.[1] We do not support a dollar size threshold separately or in conjunction with a loan count threshold. A dollar size threshold, including the $2.5 million threshold the Bureau offers as one of the options, would be too high.
  3. Report lending to small businesses with 499 or fewer employees and up to $8 million in revenue. We urge the Bureau to adopt a definition of small business as a business with fewer than 500 employees, similar to the size standard alternative under consideration. We urge the Bureau, for the sake of consistency with the Annual Business Survey, to consider revising this to fewer than 500 employees (499 employees or fewer).
  4. Factoring agreements and merchant cash advances must be covered products under Section 1071. The Bureau is proposing to exclude merchant cash advances (MCAs) from coverage in 1071. We disagree with this proposal and urge that MCAs and factoring agreements be considered covered products. MCAs are widely used by small businesses and have a rapidly growing market share, often cause businesses to incur substantial repayment liabilities, and have other harmful terms that warrant market-wide monitoring. We also urge the Bureau to define these products as credit for the purpose of this rule, rather than rely on the current interpretation of ECOA, which would exclude them.

B)    Improve fair lending supervision and enforcement in the small business lending market.

  1. The definition of application should be consistent with the definition of application under Regulation B implementing the Equal Credit Opportunity Act. This definition is consistent with the definition of application under Regulation C implementing the Home Mortgage Disclosure Act (HMDA), and is preferable to the Bureau’s alternative proposal, which would consider an application complete when all required information is completed. The CFPB must not implement this definition because, in some cases, an incomplete application occurs when the lender discriminates and indirectly or explicitly discourages an applicant from completing an application.
  2. The proposed mandatory data points adequately implement Section 1071, with some modification. Lenders must be required to report applications and denials, as well as the reason for denial, and the race and ethnicity of the borrower or borrowers consistent with the disaggregated race and ethnicity information currently required under Regulation C.
  3. Additional discretionary data points should be added to improve fair lending efforts. We urge the Bureau to collect and disclose additional data on loan pricing, time in business, number of owners and employees, and the use of personal or business credit profiles in a credit decision.

C)    Allow regulators, lenders, and the public to benchmark a lender’s affirmative obligation to meet the credit needs of the small businesses in the communities they serve. The Bureau has an unprecedented opportunity to improve the transparency of the small business market, identify lending patterns and trends, and enhance the ability of lenders to serve low-wealth communities and communities of color. To this end, we urge the Bureau to consider following the parameters in existing public datasets on the universe of small businesses, such as the Annual Business Survey, and collecting 1071 data consistently to provide a direct measure of small business loans per business. On an interagency basis, the agencies should determine if Section 1071 scope can become comprehensive enough to replace or be collected concurrently with CRA, CDFI and Small Business Administration (SBA) data collection efforts.

These improvements can ensure that data collected under Section 1071 can achieve ECOA’s statutory objectives of preventing discrimination in credit transactions by providing publicly available data on race, gender and other demographics of small business applicants for credit. We urge the Bureau to move forward with a proposed and final rule in 2021 and an implementation of no more than 12 months. For more information, please do not hesitate to contact Tom Feltner, Director of Policy at or Josh Silver, Senior Policy Advisor at


National Community Reinvestment Coalition

Affordable Homeownership Foundation, Inc.

Association for Neighborhood and Housing Development

Birmingham Business Resource Center 

Building Alabama Reinvestment

California Reinvestment Coalition

CASA of Oregon

CFORM/Covenant Community Development Corporation 

Chester Community Improvement Project


Coastal Enterprises, Inc.

Columbus Empowerment Corporation

Community Action Partnership of North Alabama, Inc.

Community First Fund

Community Reinvestment Alliance of South Florida

Consumer Action

County Corp

Fair Finance Watch

Foundation Capital

Georgia Advancing Communities Together, Inc.

Home Repair Resource Center (HRRC)

Housing Acton Illinois

Housing education and economic development

Housing Options & Planning Enterprises, Inc

Lewis Associates

Local Initiatives Support Corporation (LISC)

Metropolitan Milwaukee Fair Housing Council

Metropolitan St. Louis Equal Housing and Opportunity Council

Mississippi Housing Partnership

National Development Council

National NeighborWorks Association

NID San Diego

Northwest Indiana Reinvestment Alliance 

Olive Hill Community Economic Development Corporation, Inc

Opportunity Finance Network 

PathStone Enterprise Center

Prosperity Indiana

Reinvestment Partners

REVA Development Corporation

Rural Community Assistance Corporation

Self Help Enterprises

South Dallas Fair Park ICDC 

Southern Dallas Progress Community Development Corporation

Southwest CDC 

The Greenlining Institute 

The Pride Through Empowerment Foundation, Inc

The Twenty

Vermont Slauson EDC

Veterans Center

Working In Neighborhoods


[1] 12 CFR Part 1003 (as amended October 15, 2015)

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

Complete the form to download the full report: