Section 1071
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On May 1, 2026, the Consumer Financial Protection Bureau finalized a rule that drastically reduces who must comply with the small business lending data collection (Section 1071) required by the Dodd-Frank Act and the comprehensiveness of the information collected. Here is a chart about the new 2026 rule.
Read NCRC’s Comment on the CFPB’s Proposed Rule to Strip Section 1071 Data Collection.
NCRC Lawsuit
NCRC and a coalition of civil rights, small business and economic justice advocates filed a federal lawsuit against the Consumer Financial Protection Bureau (CFPB) and Acting Director Russell Vought for unlawfully abandoning implementation of the small business lending data collection rule mandated by Congress: Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
Topline of the 2026 Rule:
- Drastically reduces the number of institutions that need to comply: dropping from about 20% of depository institutions to 2%.
- Leaves a large gap in data collected from non-depository institutions. In 2019, non-depository institutions were estimated to be 39% of the lending market. By the CFPB’s own estimate, the 2026 rule will cover approximately 31 non-depository institutions (less than 2% of non-depository small business lenders)
- Also, excludes agriculture loans and merchant cash advances.
- Strips data required to the bare minimum and doesn’t include important data points such as disaggregated race data, LGBTQI+ status of the applicant, pricing, and denial reasons. This will make it difficult to use 1071 data to fulfill its Congressional mandate of facilitating enforcement of fair lending laws
- Lacks clarity on public access to data.
Major Changes to the 2023 Rule:
- Raises origination threshold from 100 to 1,000, resulting in approximately 2,000 fewer lenders now needing to comply with the rule.
- Narrows the definition of “small business” by lowering the gross annual revenue threshold from $5 million to $1 million, meaning fewer lenders must comply with the rule and limiting the amount of data to be collected by lenders that are still covered.
- Excludes agricultural loans, merchant cash advances, and micro loans under $1,000.
- Removes the following datapoints set forth in the 2023 rule:
- Pricing information;
- Denial reasons;
- Application method;
- Application recipient;
- Number of workers.
- Eliminates collection of :
- Disaggregated race and ethnicity data;
- Whether applicant for credit is LGBTQI+;
- Sex/Gender will be “male/female” only.
- Compliance date is now 1/1/2028.
- Unclear what public access to the data will look like, even though it is statutorily required. The CFPB says it will issue another rulemaking to determine how to publicly release 1071 data after the first year of data collection, pushing the release of 1071 data out to at least 2029 – a full 19 years after Congress required the CFPB to collect and release this information
FaQ
What is Section 1071?
Section 1071 of the Dodd-Frank Act is intended to facilitate the enforcement of fair lending laws and enable communities, government entities, and creditors to identify business and community development needs and opportunities for small businesses, including women-owned and minority-owned businesses.[1] The Consumer Financial Protection Bureau (CFPB) originally finalized its rules to implement Section 1071 of the Dodd-Frank Act on March 30, 2023.[2]
However, implementation and enforcement of the rule were stayed nationwide by federal courts due to several lawsuits challenging both the constitutionality of CFPB’s funding and provisions in the 2023 rule.
[1] Section 1071 – Small Business Loan Data Collection, Public Law 111–203—July 21, 2010, Dodd-Frank Wall Street Reform and Consumer Protection Act. Page 682. Available online at https://www.govinfo.gov/content/pkg/PLAW-111publ203/pdf/PLAW-111publ203.pdf
[2] Small Business Lending Under the Equal Credit Opportunity Act (Regulation B). CFPB. Final Rule. Federal Register / Vol. 88, No. 104. Available online at https://www.govinfo.gov/content/pkg/FR-2023-05-31/pdf/2023-07230.pdf
Who does Section 1071 apply to?
The 2023 rule applied to financial institutions that originated at least 100 small business loans in each of the two preceding calendar years.
The 2025 rule covers financial institutions if they originate 1,000 covered credit transactions for each of the two preceding calendar years, starting with originations in 2026 and 2027. The 2025 rule also excludes all agricultural lenders, merchant cash advance providers, and loans under $1,000.
Do financial institutions have to collect data now?
No, they do not. Although Section 1071 of the Dodd-Frank Act became law in July 2010, it has never gone into effect. The 2023 rule was the first time a comprehensive rule had been issued.
What are the compliance dates for covered financial institutions?
[1] Small Business Lending Under the Equal Credit Opportunity Act (Regulation B); Extension of Compliance Dates. / Vol.89, No.128. Page 1. Available online at https://www.govinfo.gov/content/pkg/FR-2024-07-03/pdf/2024-14396.pdf
Who benefits from having Section 1071 data?
The rule benefits both consumers and markets. As envisioned by Congress in Section 1071 of the Dodd-Frank Act, the small business lending rule will create the nation’s first consistent and comprehensive database on lending to small businesses, including small farms.
Over time, the rule will provide information to regulators, businesses, banks, and advocates, establishing clear information about the small business lending market. The database will also be critical in assessing fair lending enforcement, and allow a range of stakeholders to identify business and community development needs and opportunities for small businesses.
How about small farmers?
The 2025 rule specifically exempts agricultural lending from the rule, leaving small businesses needing ag credit and the public in the dark. When collected, Section 1071 data will support both new and small farmers. Currently the public has minimal information regarding which farmers are currently being served by the lending institutions that hold a majority of agricultural debt. For example, lenders within the Farm Credit System (FCS), have held as much as 44% of all agricultural debt by the end of 2021, however it is currently unclear which demographics have actually received a majority of those loans. This is despite the fact that FCS lenders already collect demographic information for home loan borrowers.[1]
[1] HEAL, Support for CFPB Section 1071 Rule and Opposition to Congressional Review Act to Overturn 1071 Rule, November 2023, https://healfoodalliance.org/healresources/#:~:text=RE%3A%20Support%20for%20CFPB%20Section%201071%20Rule%20and%20Opposition%20to%20Congressional%20Review%20Act%20to%20Overturn%201071%20Rule%C2%A0(November%202023)
Do lenders already collect similar data?
Many lenders already collect and purchase detailed demographic data about applicants in order to effectively target their credit products to different categories of borrowers. The transparency offered by Section 1071 data empowers the public to compare the lending patterns against the activity of different financial institutions, thereby identifying opportunities and gaps.
What are the arguments to weaken Section 1071?
The attacks on Section 1071 have been recycled and are ineffective. Ongoing congressional efforts to repeal or weaken Section 1071 are based on arguments that have been previously discredited.
The 2025 rule weakens data transparency by drastically reducing the number of financial institutions who must comply with the rule. Under the 2025 rule, by increasing the origination threshold from 100 to 1,000 loans, only 2% of banks and credit unions must comply, down from approximately 30% in the 2023 rule.
Other arguments assert that publicly shared Section 1071 data would put small business owners personal data at unique risk, despite the fact that similar datasets such as HMDA already exist and pose no such risks.
[1] Section 1071 Final Rule. Page 231, https://files.consumerfinance.gov/f/documents/cfpb_1071-final-rule.pdf
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