The CFPB has finalized a revised version of its Section 1071 small business lending rule that credit union advocates say significantly reduces compliance burdens compared to the agency's original 2023 framework.
America's Credit Unions released a new compliance summary this week outlining several changes included in the final rule, which takes effect June 30.
Among the most significant revisions is an increase in the reporting threshold for covered financial institutions from 100 to 1,000 covered small business loan originations during each of the preceding two years. The final rule also lowers the revenue threshold defining a "small business" from $5 million to $1 million and removes several discretionary data collection requirements.
The revised framework narrows required reporting largely to statutory data points required under Section 1071 of the Dodd-Frank Act, eliminating several CFPB-added fields involving pricing, denial reasons, worker counts and LGBTQI+-owned business status.
The CFPB also adopted a more flexible approach governing how and when institutions collect demographic information from applicants and replaced the previous tiered compliance schedule with a single compliance deadline of Jan. 1, 2028.
America's Credit Unions said the revisions will exempt many smaller and mid-sized credit unions from the rule entirely while substantially reducing reporting obligations for institutions that remain covered.
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