An outline of proposals under consideration for the collection of data on women-owned, minority-owned, and small businesses that could apply to depository institutions with assets of $600 million or less was released Tuesday by the Consumer Financial Protection Bureau (CFPB), which is welcoming feedback from stakeholders.
The outline explains proposals under consideration to implement section 1071 of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) along with the relevant law, the regulatory process, and an economic analysis of the potential impacts of the proposals on directly affected small entities.
As this potential rulemaking falls under the auspices of the Small Business Regulatory Enforcement Fairness Act (SBREFA), the CFPB said it will convene a SBREFA Small Business Advocacy Review panel on the measure in October. It said the panel will prepare a report on the potential rule’s impact on small businesses and that the bureau will consider that report and feedback from small businesses in its rulemaking.
The bureau, in its outline, notes that small entities likely to be directly affected by the rulemaking within the meaning of SBREFA include depository institutions “such as commercial banks, savings associations, and credit unions with assets of $600 million or less.”
The proposals under consideration address what is a covered applicant, what is a covered product, what are mandatory vs. discretionary data points, what constitutes an application that would trigger data collection requirements, data privacy, and more.
A couple takeaways from the 79-page document include:
- The bureau is considering proposing that covered products for this rulemaking include term loans, lines of credit, business credit cards. It is proposing that the section 1071 rule not apply to consumer-designated credit, leases, factoring, trade credit, and merchant cash advances.
- The bureau is considering proposals, in light of section 1071’s statutory purposes, to exempt financial institutions from any collection and reporting requirements based on either or both a size-based and/or activity-based threshold.
The bureau, in its outline, said written feedback from small entity representatives is due by Nov. 9 in order to be considered and incorporated into the SBREFA panel’s report. Other stakeholders wanting to provide feedback are asked to do that no later than Dec. 14. Feedback should be emailed to emailed it to 2020-SBREFA-1071@cfpb.gov.