Comments due on CFPB Reg B small business data collection proposal

The CFPB has announced a proposed new rule, mandated by Congress in section 1071 of the Dodd-Frank Act, that would, if finalized, require lenders to disclose information about their lending to small businesses, allowing community organizations, researchers, lenders, and others to better support small business and community development needs. Under the proposal, lenders would be required to report the amount and type of small business credit applied for and extended, demographic information about small business credit applicants, and key elements of the price of the credit offered.

The CFPB also launched a web portal for small business entrepreneurs to share their stories about applying for credit, which will help the CFPB understand small business entrepreneurs’ challenges and successes in accessing credit. The portal can be found on the CFPB's Small Business Lending webpage.

The CFPB is proposing to publish application-level data. However, to address privacy concerns, the CFPB is proposing to modify or withhold data from public disclosure based on an assessment of the risks to privacy interests and the benefits of publication.

In addition to comments on the overall proposal, the CFPB specifically seeks comments on a variety of issues, including:

• How to define a small business for purposes of this data collection;
• Where to set the activity threshold for when a lender is required to report information;
• How best to collect pricing information for transparency into the cost of small business credit;
• Whether and how to collect certain information about the sex of an applicant’s principal owners;
• How to balance the benefits of public disclosure and the risk to privacy interests; and
• The appropriate implementation period.

The CFPB also said specific and detailed feedback and suggestions for ways to improve the rule will be especially helpful as the Bureau works to finalize the rule in a timely manner. The comment period is 90 days from publication in the Federal Register, and the CFPB does not anticipate an extension of that deadline.

• Proposed rule
• Table of Contents for the proposal
• Summary of the proposal
• Chart of proposed data points for reporting
• Remarks of Acting Director Uejio at the press call on the proposal rule
• PUBLICATION AND COMMENT PERIOD UPDATE: Scheduled for publication in the Federal Register on 10/8/2021. Comments will be due by 1/6/2022.