CFPB to initiate new section 1071 rulemaking

The CFPB indicated it will issue a new proposed rule on small business lending data collection under section 1071 of the Dodd-Frank Act.

In a legal response filed Thursday, new leadership at the CFPB “has been assessing the Final Rule and the issues that this case presents to determine the CFPB’s position. CFPB’s new leadership has directed staff to initiate a new Section 1071 rulemaking. The CFPB anticipates issuing a Notice of Proposed Rulemaking as expeditiously as reasonably possible.”

“We’re grateful the CFPB intends to revisit this rule, as the current final rule threatens to increase complexity and costs for credit unions simply trying to provide access to credit tailored to the needs of small businesses,” said America’s Credit Unions Chief Advocacy Officer Carrie Hunt. “We hope that, under new leadership, the CFPB will scale back this rule to solely what’s required in statute and let credit unions continue to work in partnership with small businesses all around the country.”

America’s Credit Unions, Cornerstone League, and Rally Credit Union challenged the rule after it was finalized, which was cited in Thursday’s filing from the CFPB. That lawsuit is currently on appeal before the Fifth Circuit Court of Appeals. The group filed a motion for summary judgement in March of 2024, which was ultimately denied.

The House Financial Services Committee passed legislation Wednesday that would repeal the rule, which America’s Credit Unions strongly supported.