Redlining and the new emerging threat.

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Question:

Did you know that Section 1071, small business data reporting may potentially bring redlining risk to your institution?

Answer:

On March 30, 2023, the Consumer Financial Protection Bureau (CFPB) published an 888-page final rule to implement Section 1071 of the Dodd-Frank Act. That section amends the Equal Credit Opportunity Act (ECOA) to require financial institutions to collect and report certain data in connection with credit applications made by women, minority, and/or LGBTQI+ owned businesses and small businesses. New data means new analysis which may indicate disparities in your lending practices.