On Nov. 6, 2019, the Consumer Financial Protection Bureau (CFPB) Director, Kathleen Kraninger, delivered a speech on a provision of the Dodd-Frank Act requiring financial institutions to collect more information for certain types of businesses. Section 1071 of the Dodd-Frank Act requires financial institutions to collect, report and make public certain information concerning credit applications made by women-owned, minority-owned and small businesses. The CFPB will have to develop rules to implement the collection, reporting and publication of the data. In her speech at the CFPB Symposium on Section 1071, Director Kraninger stated the importance of exploring “…how to efficiently collect appropriate data without imposing unnecessary or undue costs that could limit access to credit from existing market participants or discourage new entrants into the market for small business credit.” Issues needing to be addressed before implementing new rules include the definition of small business, what data points are important to collect and what information lenders are currently using to evaluate credit to small businesses.

Author

John Zasada, JD, CAMS – Compliance Consulting Director, Financial Institutions Group. John can be reached at zasada@doeren.com.