The Consumer Federation of America released the following statement in response to the Consumer Financial Protection Bureau’s revised final rule implementing the Section 1071 Small Business Lending data rule. 

“Too many businesses are shut out of receiving affordable credit,” said Adam Rust, Director of Financial Services at the Consumer Federation of America, “and that is especially true for businesses owned by women and people of color. With this revised rule, the Trump CFPB has abandoned its responsibility to protect small business owners from discrimination. The new rule narrows the number of lenders covered, buries the reasons behind denials, and strips away needed granularity on demographics and loan pricing. Sadly, the CFPB struck merchant cash advances from coverage entirely, disregarding the reality that these high-cost fintech loans are all too often the primary source of credit for many small businesses and startups. It’s not a revision so much as a retreat, and it’s the small businesses fueling our economy who will bear the cost.” 

Background: The CFPB published a final rule implementing Section 1071 in 2023. The rule was immediately challenged in court by a Texas bank and two banking trade associations, resulting in a stay of the rule’s compliance dates. Last summer, the CFPB issued an interim final rule to extend the compliance date for one year and issued proposed revisions. The final rule implements those proposals, and in some cases weakens the rule’s effects even further.