On September 15th, the CFPB announced that it is in the process of writing regulations to implement Section 1071 of the Dodd-Frank Act. These are the long-awaited and much-discussed requirements to collect and report data for women-owned, minority-owned and small business credit applications.
As with most rules, there will be key terms that need defined, including the applications and institutions that will be covered. In addition, while the Act lays out mandatory data points, it also allows the CFPB to require collection and reporting of any additional data points that it feels would be helpful. What those data points may be and when that data collection is to occur are all items that the CFPB is looking to address. The CFPB also needs to address safeguarding that data (and accompanying disclosures); an applicant’s right to not provide certain information; and the collecting, maintaining, and reporting process.
The CFPB has provided some insight into some of the different options it is considering to implement these requirements. A High-Level Summary as well as a more detailed Outline have been made available, as well as a Discussion Guide for Small Entity Representatives.
We plan to look at this in more detail in our upcoming October edition of Banking on BCC.
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