Important Update:
The Consumer Financial Protection Bureau (CFPB) has declared an extension of the compliance deadlines for the Small Business Lending Rule on May 17, 2024. This rule, implementing Section 1071 of the Dodd-Frank Act, will mandate covered financial institutions to gather and report data on their small business lending activities.
Under the scheduled timeline, the highest volume lenders (Tier 1) must start collecting small business lending data by July 18, 2025, with initial submissions due on June 1, 2026. Tier 2 lenders will commence data collection on Jan. 16, 2026, and submit their first reports by June 1, 2027. The smallest volume lenders (Tier 3) are required to initiate data collection on Oct. 18, 2026, and submit their first reports on June 1, 2027.
Following recent developments, the CFPB has announced an interim final rule to postpone all compliance deadlines for the Small Business Lending Rule as a compensation measure for the interrupted period. This decision comes after legal hurdles involving a nationwide injunction and a Supreme Court ruling affirming the constitutionality of the CFPB’s funding structure.
Although the official publication of the revised deadlines is pending, the CFPB has shared the adjusted compliance dates for each institution tier. It is crucial for covered financial institutions to prepare for the new obligations and operational changes mandated by the Small Business Lending Rule.
In summary, the implementation of the CFPB’s Small Business Lending Rule presents substantial compliance challenges and necessitates proactive measures from lenders to ensure readiness. Additionally, the rule’s requirement for public data disclosure may lead to regulatory scrutiny and legal actions, emphasizing the importance of addressing any deficiencies in fair lending programs promptly.
