CFPB headquarters. (Source: Shutterstock)
Amid allegations that the agency was stalling, the CFPB last week agreed to speed up the process for issuing rules requiring financial institutions to report certain data in connection with credit applications made by minority-owned, women-owned and small businesses.
The agreement was reached as part of the settlement of a suit filed by groups, including the California Reinvestment Coalition.
In the suit filed in May, in the U.S. District Court for the Northern District of California, the groups charged that the CFPB was violating federal law by failing to issue rules implementing one section of the Dodd-Frank Act. That section included requirements that financial institutions report the race, sex and ethnicity of business owners in connection with the credit applications.
Requiring the reporting of such data "would incentivize financial institutions to ensure that all communities have equal access to credit," the groups said.
The agency denied that it was stalling.
Instead, the CFPB said it was trying to ensure that the rule "can be implemented in a way that helps (rather than hurts) the businesses it was meant to benefit, but also that the Bureau can meet its other statutory and regulatory obligations."
Representatives of financial trade groups have expressed concern about the burden of collecting and reporting such data.
Under the agreement, the CFPB will issue an outline of proposed rules by Sept. 15. And by Oct. 15, the agency will convene a Small Business Advocacy Review panel to examine proposals.
The two sides will meet at a later date to discuss additional deadlines, including a date for the issuance of a final rule.
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