Members of the public have until Jan. 6 to submit comments on a consumer financial protection agency proposal to require financial institutions to collect and report data on business loan applications, including from women- and minority-owned businesses.
Issued Sept. 1 by the Consumer Financial Protection Bureau (CFPB), the proposed rule would revise the bureau’s Regulation B, which implements the Equal Credit Opportunity Act (ECOA), to require lenders to disclose the amount and type of small business credit applied for and extended, demographic information about small business credit applicants, and key elements of the price of the credit offered. The bureau said the proposed reporting requirements would apply to a wide range of credit products, including term loans, lines of credit, credit cards, and merchant cash advances.
The bureau said the information collected and reported would allow it to learn how small enterprises fare when trying to access financing and what barriers are holding them back from further prosperity.
The collection of small-business data is called for under section 1071 of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). According to the CFPB, section 1071 (which revised the ECOA) complements other federal efforts to ensure fair lending and to promote community development for small businesses, including through the ECOA, the Community Reinvestment Act of 1977 (CRA), and the Community Development Financial Institutions (CDFI) Fund.