The U.S. Capitol
Congressman Roger Williams (R-Texas), chair of the House Small Business Committee, has introduced legislation to repeal Section 1071 of the Dodd-Frank Act, a rule requiring financial institutions to collect and report data on small business loan applications. Credit unions and other financial institutions have argued the rule imposes excessive compliance burdens with little benefit, ultimately restricting access to credit for small businesses.
Section 1071 mandates the collection of demographic and financial data on applications from women-owned, minority-owned and small businesses. Supporters of the repeal have argued that these reporting requirements create significant costs for lenders, particularly credit unions and community banks, without meaningfully improving lending fairness.
“Supporting regulatory relief for America’s small businesses is critical for the prosperity of our country,” Carrie Hunt, chief advocacy officer at America’s Credit Unions, said. “America’s Credit Unions is proud to support Congressman Williams’ bill. The requirements should be appropriately tailored to ensure the health and financial needs of small businesses continue to be met. The American Dream of owning a business is one that everyone should have the opportunity to pursue, and credit unions are ready to partner on the endeavor.”
America’s Credit Unions, along with the Cornerstone League and Rally Credit Union ($4.5 billion, Corpus Christi, Texas), filed a legal challenge against the rule, arguing it would place undue burdens on credit unions. However, the U.S. District Court of the Southern District of Texas denied the challenge. Despite this setback, credit union advocates have continued to push for a legislative solution.
“We applaud Rep. Williams’ efforts to minimize regulatory burdens on community lenders and expand small business owners’ access to credit,” Jim Phelps, EVP and chief advocacy officer of the Cornerstone League, said. “Credit unions, especially smaller ones, are disproportionately affected by complex regulations. Repealing Section 1071 would enable credit unions to focus on their core mission — serving their members and communities.”
The House Financial Services Committee recently held a hearing on the bill, with several witnesses agreeing that the 1071 rule would lead to increased compliance burdens and higher operational costs.
Under the current timeline, compliance with the Section 1071 final rule is set to begin in July 2025 for Tier 1 institutions, followed by January 2026 for Tier 2 and October 2026 for Tier 3.
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Michael Ogden
Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
