John Zasada, Compliance Consulting Director, Financial Institutions Group

On Sept. 1, 2021, the Consumer Financial Protection Bureau (CFPB) issued a proposed rule which would require lenders to collect and report data about credit applications from small businesses, including women-owned and minority-owned small businesses. The 918-page proposed rule is intended to determine if lenders are meeting the needs of small businesses.

If passed, lenders would be required to report whether the business is minority-owned or women-owned, and the ethnicity, race and sex of the applicant’s principal owners. This would apply to term loans, lines of credit, credit cards and merchant cash advances. In addition to this, lenders would also have to report information related to the below:

  • Application date
  • Method the application was received (in-person, telephone, online or mail)
  • Recipient of the application (the lender or its affiliate or submitted via a third party)
  • Action taken by the lender on the application (originated, approved but not accepted, denied, withdrawn by the applicant or incomplete)
  • Date of action taken
  • Denial reasons when applicable

Doeren Mayhew will keep you updated on the progress of the proposed rule. Should you need help ensuring your institution is in compliance with Regulation B, contact our regulatory compliance specialists today.