July 17, 2025
RE: Small Business Lending Under the Equal Credit Opportunity Act (Regulation B); Extension of Compliance Dates, Docket No. CFPB–2025–0017, RIN 3170–AB40
Dear Director Vought:
The National Community Reinvestment Coalition (NCRC) opposes the Interim Final Rule regarding the extension of compliance dates concerning Section 1071 small business data. We urge the Consumer Financial Protection Bureau (CFPB) to implement the 2023 Final Rule immediately.
NCRC is a network of more than 700 community-based organizations dedicated to creating a nation that not only promises but delivers opportunities for all Americans to build wealth and attain a high quality of life. We work with community leaders and policymakers to advance solutions and build the will to solve America’s persistent racial and socio-economic wealth, income, and opportunity divides and to make a Just Economy a national priority and a local reality. NCRC has dozens of organizations, which are small business technical assistance providers, Community Development Financial Institutions, and advocates who depend on robust data to identify credit needs and to increase access to credit to traditionally underserved small businesses.
The public needs the Section 1071 data urgently and has waited patiently since the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 for this long-delayed data. The experience with the Home Mortgage Disclosure Act (HMDA) data has demonstrated that public disclosure of bank lending patterns by demographic characteristics of borrowers has significantly increased lending to traditionally underserved borrowers and communities.
Similarly, the current small business data submitted under the Community Reinvestment Act (CRA) has increased lending to small businesses in low- and moderate-income neighborhoods. However, the data derived from the Community Reinvestment Act is limited in its usefulness in boosting lending to minority- and women-owned small businesses since it does not contain lending by demographic characteristics of small businesses.
The purpose of Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act is to “facilitate enforcement of fair lending laws and enable communities, governmental entities, and creditors to identify business and community development needs and opportunities of women-owned, minority-owned, and small businesses.”[1] As carefully designed over several years, implementing CFPB’s 2023 Final Rule would have achieved this critical purpose since it not only had detailed data on the demographics of small businesses but also information on the affordability and sustainability of loans revealed by pricing data and information on loan terms and conditions.
The 2023 CFPB Final Rule Was Thorough and Exhaustive, Taking Into Account Administrative Burdens and Costs.
In developing the Final Rule for Section 1071, the CFPB under the first Trump Administration and during the Biden Administration engaged an extensive list of stakeholders, weighing all arguments carefully. Over the years, the CFPB undertook thorough research and investigation of the small business lending marketplace to determine the most effective means of collecting and disseminating small business data.[2] At times, the deliberate speed of the CFPB was frustrating to stakeholders who wanted an expeditious development and release of the data needed for addressing credit gaps. Yet, the CFPB designed a deliberate approach in order to develop a rule that rested on sound research and strove to achieve consensus among stakeholders by carefully soliciting and considering their input.
One of the CFPB’s early steps was establishing the Small Business Markets Lending Office that was tasked with researching the small business market and estimating its size and characteristics for purposes of developing proposals for data collection.[3] This office released a report in May of 2017 called Key Dimensions of the Small Business Landscape.[4] In its review of existing data sources, the report lauded their usefulness but also pointed out their significant limitations, pointing out how Section 1017 data is needed to more fully understand the small business lending landscape. The report stated:
Several of the indices (pre-Section 1071 surveys) do allow an understanding of the demand for business credit over time from the perspective of business borrowers. However, these indices and underlying surveys largely rely on aggregated business perception… As such, responses to these surveys and resulting indices may be somewhat subjective without an appreciation of the underlying dynamics; the responses may depend on the selection of businesses surveyed for a particular iteration of the index. Further, these indices provide no understanding of the demographic of business applicants and subsequent approval rates.[5]
The CFPB subsequently designed Section 1071 data to provide detailed information on the demographics of the small business owners and the approval rates for their loan applications. The Section 1071 data would contain additional data points that fleshed out which types of small businesses, such as the younger ones or those with fewer employees that would most likely have the most difficulties obtaining loans.
On the heels of the Key Dimensions report, the CFPB held field hearings across the country to obtain the views of stakeholders regarding the value of the data and how to design the database. NCRC testified at the first field hearing in Los Angeles in May of 2017.[6] At the same time, the CFPB released a request for information on the lending marketplace to further collect information and views from a wide variety of stakeholders.[7] The agency extended the comment period to September 2017 to further accommodate the wishes of stakeholders who wanted to develop and refine their views.[8]
The CFPB’s investigations and information gathering continued over subsequent years, including holding a symposium attended by former Director Kathy Kraninger in November of 2019. NCRC testified at this hearing as well.[9] Director Kraninger described the importance of this topic by linking Congress’s desire for data with the needs of millions of small business owners:
Small businesses, including those owned by women and minorities, are critical engines for economic growth. According to the Census Bureau, there are more than 27.6 million small businesses in the United States. More than 7.9 million of these businesses are minority-owned and over 9.8 million are women-owned.
Access to financing is a crucial component of the success of these businesses. To contribute meaningfully to the U.S. economy, small businesses — including minority- and women-owned small businesses — need access to credit to smooth out business cash flows and to enable entrepreneurial investments that take advantage of, and sustain, opportunities for growth.
Section 1071 would increase public data about small business lending. Congress wanted the Bureau, and the public generally to better understand the landscape for all small businesses, and specifically those owned and operated by women and minorities. And the law specifically directs the Bureau to develop a rule for the collection, reporting, and publication of certain data.[10]
As required by the Small Business Regulatory Enforcement Fairness Act (SBREFA), the CFPB convened a panel of small business stakeholders, including a variety of smaller lenders, in December 2020. The CFPB took the further step of inviting public comment on the benefits and costs of data collection, releasing a comprehensive report for the public to consider while preparing their comments.[11] After carefully considering comments, the CFPB issued a notice of proposed rulemaking almost a year later in September of 2021. The CFPB sifted through the scores of comments it received, conducted additional analysis and research, and issued a final rule almost two years later in March of 2023.[12]
The Final Rule required data points that the Section 1071 provision of Dodd-Frank mandated, including the demographics of the small business borrowers. However, the CFPB also employed its discretion as permitted under the statute to collect additional points that would help stakeholders understand the abilities of different types of small businesses to acquire credit. These variables included the number of years in business and the number of employees, both of which previous research revealed are key indicators associated with acquiring credit.[13]
In addition, lending institutions as well as community groups believed that information on interest rates and fees was critical to determining the ability of small businesses to afford their loans and use their loans to grow and prosper.[14] The CFPB thus included information regarding interest rates (fixed or adjustable rate), fees, the presence of prepayment penalties, and whether the loan was a term loan or a merchant cash advance (a form of credit in which a small business makes periodic payments as a percentage of sales).[15]
After the CFPB’s issuance of the Final Rule, industry trade associations and individual banks sued the agency, alleging it exceeded its authority granted in Section 1071. However, two courts ruled in the CFPB’s favor and indicated that the agency prudently implemented Section 1071 in a manner that maximized the benefits of data disclosure while minimizing costs.
The Texas Bankers Association filed the first lawsuit in the United States District Court for the Southern District of Texas. In a decision issued in the summer of 2023, Randy Crane, a judge appointed by George W. Bush, ruled against the association, concluding that the CFPB’s “administrative record is voluminous, and its breakdown of the Bureau’s decision-making is comprehensive; moreover, the agency has reasonably assessed the effects of the Final Rule, including its anticipated costs versus benefits. The Court therefore “do[es] not find the agency’s action outside the realm of reasonableness.”[16]
In particular, the court sided with the CFPB’s meticulous cost-benefit analysis and found that the association had exaggerated the costs of the Final Rule. In particular, the association alleged that the Final Rule mandated the collection of 81 data points or variables, while the Section 1071 provision of Dodd-Frank had only required 13 data points. The court disagreed, asserting that the CFPB properly used its discretionary authority to require only nine additional data points beyond those specified in Section 1071’s text. NCRC’s analysis came to a similar conclusion regarding the CFPB’s modest addition of carefully selected discretionary data points.[17]
Moreover, the association alleged that implementing the final regulation would be so costly that several lenders would need to reduce their lending activity to decrease costs. The court again sided with the agency’s analysis that lending would not be reduced but that interest costs could be increased modestly, citing the CFPB’s conclusion that any additional costs passed onto consumers would only “comprise a small portion of the total cost of the average loan” and would thus not meaningfully impact affordability.[18]
On the heels of this decision, a Florida magistrate judge ruled against a second one this February that had been filed by an association representing merchant cash advance (MCA) companies. The MCA association alleged that the CFPB erred in designating MCAs as a form of credit. The Florida court disagreed, asserting that MCAs meet the definition of credit (and thus covered by Section 1071) since credit involves allowing the borrower to defer payment and pay over a future period.[19]
The court also asserted that covering MCAs by Section 1071 was beneficial since traditionally underserved businesses often rely on MCAs given their high approval rates, but that these businesses do not consider costs that will now be part of the publicly available Section 1071 data. The court, therefore, concluded that the CFPB had properly assessed the costs as well as the benefits of the Final Rule.
Finally, the current CFPB leadership acknowledges the benefits and modest costs of the 2023 rule. The CFPB states in its Interim Final Rule that:
As enumerated in the 2023 Final Rule, benefits include more efficient fair lending review
prioritization by regulators and the institutions’ own use of small business lending data to better understand small business credit demand and the supply by their competitors…. in general, the CFPB expects the magnitude of any pass-through to be a small portion of the total cost of the average loan to a small business applicant.[20]
CFPB’s Actions in 2025 Delay Implementation of the Rule and Cause Confusion.
CFPB’s recent actions undermine the carefully developed Section 1071 rule. In an April 2025 press release, CFPB stated that the Agency will not prioritize supervision for entities outside the stay imposed in the Texas Banker’s Association case.[21]
Subsequent to the press release, CFPB issued its Interim Final Rule delaying compliance with Section 1071 data requirements by an additional year. Yet, this delay only confuses matters. For example, the delay in the compliance date means that the date for compliance has been moved from July 1, 2025, to July 1, 2026, for the highest volume lenders. The notice further states that lenders can start implementation actions and testing their systems up to a year before compliance.[22] This means that the largest lenders can start testing their systems now, which is about one year before compliance. However, that is a confusing message because the agency also indicates in its Interim Final Rule that it will modify the final 2023 rule as soon as practicable. So why would a lender want to start testing its data collection system if a new proposed rule would alter the required data points. Lenders will increasingly call into question the seriousness and thoughtfulness of the CFPB’s implementation of Section 1071 and other rules.
Another confusing aspect of the Interim Final Rule regards the compliance dates for the largest volume and smallest-volume lenders. The largest volume lenders report data for half of the year of 2026 since the compliance date is July 2026. The smallest volume lenders report data for just three months for 2027 since their compliance date is October 2027.[23] Data users may not realize that for some of the years, not all covered lenders would be reporting and that reporting lenders would not include data from all months of a given year. This renders the data meaningless for comparing the performance of lenders of different loan volumes and for assessing annual performance. It would be more straightforward for the CFPB to indicate that compliance starts for all lenders the calendar year following the resolution of the lawsuits. Lenders have had ample time to prepare since considerable delays have already occurred. Staggered state dates and partial year reporting are not necessary.
Instead of its current approach, the CFPB should defend the existing rule that two courts have found reasonable and encourage lenders to get their systems ready for compliance. It is confusing for the agency to admit the benefits of the rule while issuing uncertain indications about the timing and ultimate design of the small business data.
Transparent Section 1071 Data Increases Access to Credit for Small Businesses
We urge the CFPB to become a steward of publicly available data to help small businesses obtain better access to credit.
As a national organization with 700 members, NCRC relies on publicly available data such as those collected under Section 1071 to help small businesses make business decisions by analyzing economic trends and by conducting local market research for NCRC members.
Without reliable and accurate Section 1071 data points as those set forth in the Final Rule, NCRC cannot accurately assess the scope and geographic distribution of lending disparities; nor can NCRC provide accurate research and technical assistance about loan approval rates or forecast geographic areas where small businesses are most in need of credit.
Furthermore, without such data, NCRC cannot analyze gaps in credit access for its members nor can NCRC discern denial patterns; benchmark performance among lenders; assess financial products, detect discriminatory lending practices or interest rate disparities.
Another effective use of Section 1071 data would be during the bank merger process. When banks seek to merge, they are legally required to demonstrate a public benefit because of their mergers.[24] Community Benefit Agreements (CBAs) are one concrete way many banks have embraced this legal requirement. Often negotiated with community organizations, CBAs commit the merging banks to increase their lending and investing in modest income neighborhoods after their mergers. Both banks and community organizations use data when discussing CBAs and when verifying that the post-merger lending levels represent increases in lending. Since 2016, NCRC and its member organizations have negotiated 22 CBAs totaling $589 billion for mortgage, small business, and community development lending, investments, and philanthropy in LMI and under-resourced communities.[25] The ability of banks and community organizations to effectively channel more loans for small business owners would increase if the Section 1071 data were available during the merger application process.
Conclusion
The benefits of having transparent small business data resulting from the implementation of Section 1071 are immense and clear. They dwarf the modest costs documented by the CFPB and are confirmed by two courts. All aspects of the rule have been carefully considered and included exhaustive stakeholder input. The current lack of data in small business lending contributes to the persistent gaps in access to credit for small businesses and decreases economic growth and jobs hiring in communities. NCRC urges the CFPB to implement Section 1071 immediately. Doing so will provide a full and transparent picture of the small business lending market and access to credit.
Thank you for the opportunity to comment on this important matter. If you have any questions, please contact Jesse Van Tol at jvantol@ncrc.org or Josh Silver, Senior Fellow, at jsilver97@gmail.com.
Sincerely,
Jesse Van Tol
President & CEO
National Community Reinvestment Coalition (NCRC)
ABLE Advocates for Basic Legal Equality Inc
Adelante Mujeres
ASIAN, Inc.
Baltimore Community Lending
Black Cultural Zone Community Development Corporation
CASA of Oregon
Center for Responsible Lending
East LA Community Corporation
Georgia Advancing Communities Together, Inc.
Georgia Watch
HARLINGEN COMMUNITY DEVELOPMENT CORPORATION
HEAL (Health, Environment, Agriculture, Labor) Food Alliance
Housing Opportunities Made Equal of Greater Cincinnati
Housing Oregon
Innercity Community Development Corporation
Jeanne V. Shaw, Consultant
NWCS, Inc.
PACDC
Prestamos CDFI
RICH Community Resources
Rise Economy
Small Business Majority
Southwest Community Development Corporation
The Hispanic and Immigrant Center of Alabama
Tierra del Sol Housing Corp
United South Broadway Corporation
Urban Land Conservancy
Opportunity Finance Network
[1] Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No:111-203, 124 Stat. 2056 (2010), Sec. 1071, https://www.congress.gov/bill/111th-congress/house-bill/4173/text
[2] CFPB, Small business lending rulemaking, we have issued a Final Rule to implement section 1071 of the Dodd-Frank Act, https://www.consumerfinance.gov/1071-rule/
[3] Director Kraninger’s Speech at CFPB Symposium on Section 1071 of the Dodd-Frank Act, November 06, 2019, https://www.consumerfinance.gov/about-us/newsroom/director-kraningers-speech-cfpb-symposium-section-1071/
[4] CFPB, Key dimensions of the small business lending landscape, May 2017, https://files.consumerfinance.gov/f/documents/201705_cfpb_Key-Dimensions-Small-Business-Lending-Landscape.pdf
[5] CFPB, Key dimensions, p. 38.
[6] CFPB, Field hearing about small business lending in Los Angeles, https://www.consumerfinance.gov/about-us/events/archive-past-events/field-hearing-about-small-business-lending-los-angeles-ca/
[7] CFPB, Grady Hedgespeth and David Silberman, Request for information on small business lending, May 10, 2017, https://www.consumerfinance.gov/about-us/blog/request-information-small-business-lending/
[8] CFPB, Request for Information Regarding the Small Business Lending Market: Extension, Federal Register, Vol. 82, No. 132, Wednesday, July 12, 2017, p. 32177.
[9] CFPB Symposium: Section 1071 of the Dodd-Frank Act, November 13, 2019, https://www.consumerfinance.gov/about-us/events/archive-past-events/cfpb-symposium-section-1071-dodd-frank-act/ and NCRC testimony, https://files.consumerfinance.gov/f/documents/cfpb_taylor-written-statement_symposium-section-1071.pdf
[10] Director Kraninger’s Speech at CFPB Symposium on Section 1071 of the Dodd-Frank Act, November 6, 2019, https://www.consumerfinance.gov/about-us/newsroom/director-kraningers-speech-cfpb-symposium-section-1071/
[11] Final Report of the Small Business Review Panel on the CFPB’s Proposals Under Consideration for the Small Business Lending Data Collection Rulemaking, December 14, 2020, https://files.consumerfinance.gov/f/documents/cfpb_1071-sbrefa-report.pdf
[12] CFPB, Small business lending rulemaking, we have issued a Final Rule to implement section 1071 of the Dodd-Frank Act, https://www.consumerfinance.gov/1071-rule/
[13] Federal Reserve Bank of New York (August 2017). Small Business Credit Survey: Report on Startup Firms. p. iv, and Nat’l Small Bus. Ass’n, 2016 Year-End Economic Report (July 2017), https://www.nsba.biz/wp-content/uploads/2017/02/Year-End-Economic-Report-2016.pdf.
[14] Statement of Richard H. Neiman Head of Public Policy, LendingClub at the Consumer Financial Protection Bureau “Symposium on Dodd-Frank Act Section 1071”, November 6, 2019, p. 4, https://files.consumerfinance.gov/f/documents/cfpb_nieman-written-statement_symposium-section-1071.pdf
[15] CFPB, Small Business Lending Rule: Data Points Chart, https://files.consumerfinance.gov/f/documents/cfpb_small-business-lending-data-points-chart.pdf
[16] Decision of Randy Crane, Chief United States District Judge in Texas Bankers Association v. CFPB, August 26, 2024, https://fingfx.thomsonreuters.com/gfx/legaldocs/byvrqwmawpe/08262024cfpb.pdf
[17] Kevin Hill, Don’t Fear The Data: Why The Lawsuit To Repeal Section 1071 Is Wrong, NCRC, June 6, 2023, https://ncrc.org/dont-fear-the-data-why-the-lawsuit-to-repeal-section-1071-is-wrong/
[18] Decision of Judge Randy Crane.
[19] Decision of Eduardo I. Sanchez, United States Magistrate Judge in Revenue Based Finance Coalition v. CFPB, https://debanked.com/pdfs/rbfc-cfpb-lawsuit-ruling.pdf
[20] CFPB Extension of Compliance Dates, p. 25878.
[21] CFPB Keeps Its Enforcement and Supervision Resources Focused on Pressing Threats to Consumers, April 30, 2025, https://www.consumerfinance.gov/about-us/newsroom/cfpb-keeps-its-enforcement-and-supervision-resources-focused-on-pressing-threats-to-consumers/
[22] CFPB, Small Business Lending Under the Equal Credit Opportunity Act (Regulation B); Extension of
Compliance Dates, Federal Register, Vol. 90, No. 116, Wednesday, June 18, 2025, p. 25876
[23] CFPB Extension of Compliance Dates, p. 25875.
[24] FDIC webpage section regarding the Federal Deposit Insurance Act, specifically Section 18(c)(5)(B) via https://www.fdic.gov/regulations/laws/rules/1000-2000.html
[25] Community Benefit Agreements: How Banks Ensure They Meet Local Needs, NCRC, https://ncrc.org/cba/
