Section 1071 of the Dodd-Frank Act


What It Is

Section 1071 of the Dodd-Frank Act expands data collection requirements for financial institutions in the small business lending market. As banks prepare to implement the CFPB’s recently defined scope and requirements of the regulation, the complexities of collecting and reporting credit application data on woman-, minority-owned, and LGBTQI+ small businesses under Section 1071 cannot be overstated due to the nature of small business lending and the ways these applications are processed.

Why It Matters

When implemented thoughtfully and in partnership with key stakeholders, collecting more data on small business lending has great potential to advance the goal banks and the CFPB of share of financing the American Dream and expanding access to credit in underserved communities. However, there is also an increased risk of collecting misleading or incomplete data that could negatively impact small businesses and stifle small business lending.

What We Believe

The CFPB must recognize the significant time and resources necessary for banks to meet new regulatory expectations and deliver on the intent of Section 1071 in the market.
Continued evaluation of the value of the information collected should be undertaken to ensure data is accurate and not overly broad and complex.
The $5 million dollar threshold should be reevaluated and ratcheted down to ensure data is truly focused on small businesses and not complex organizations.


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