CUs Continue Fight Against CFPB's Small Biz Lending Collection Rule

The CFPB’s small business lending data collection rule should be set aside, America’s Credit Unions, Cornerstone League, Rally Credit Union, and other organizations wrote in a consolidated motion for summary judgment filed in the U.S. District Court for the Southern District of Texas. The CFPB finalized its rule requiring financial institutions to collect and report certain data on applications for credit for women-owned, minority-owned, and small businesses in March 2023. Credit unions led a successful push last year to stop the rule's implementation.

"While we recognize that CFPB had a statutory mandate to issue this rule, we fought for a rule that represented the least possible burden to credit unions. Our concerns remain that the scope of the rule and the regulatory burden it represents might well disincentivize some credit unions from offering small business lending, depriving small businesses of an important source of credit for fueling growth and creating jobs," notes League Chief Advocacy Officer JT Blau. "We would note that existing data already demonstrates credit unions' strong history of small business lending."

The Consumer Financial Protection Bureau's (CFPB) final rule on section 1071 of the Dodd-Frank Act would require credit unions to collect and report certain data on applications for credit. We urged the CFPB as it crafted the final rule to carefully consider how the scope of its rule might impact the cost of small business borrowing and how burdensome data collection required by the rule would affect smaller financial institutions, like credit unions. We also noted the potential privacy concerns related to the public release of this data.