The CFPB has rolled out proposed revisions to the 1071 rule under the Dodd-Frank Act. Here’s a quick look at what’s changing and what information you may need to start gathering if the rule moves forward.

The CFPB’s goal is to simplify the rollout, beginning with a focused foundation and expanding later. The proposed rule includes the following coverage changes:

  • Excludes certain lending types that were previously included in the definition of “Covered Credit Transactions,” including:
  • Agricultural loans
  • Merchant cash advances
  • Business credit ≤ $1,000.
  • Raises the threshold of a “Covered Institution” from 100 to 1,000 covered credit transactions in each of the two preceding years.
  • Excludes Farm Credit System lenders.
  • Revises the definition of “Small Business” to businesses with gross annual revenue of $1 million or less (previously $5 million).

Proposed Data Collection Changes:

  • Eliminates several Data points, including:
    • Application method
    • Application recipient
    • Denial reasons
    • Pricing information
    • Number of workers
  • Retains required data points, such as:
    • Ownership status (women/minority-owned)
    • Gross annual revenue
    • NAICS code
    • Years in business
    • Number of principal owners
    • Demographic information for each principal owner (race, sex/gender)
    • Census tract
    • Unique identifier for each application
    • Date of application
    • Type of credit
    • Amount applied for
    • Action Taken

The proposed rule has extended the compliance dates to January 1st, 2028, for all covered financial institutions.

You can view the full proposal here.

What does this mean to you?

  • If your bank originates fewer than 1,000 small-business credit transactions annually, you may be exempt.
  • Focus on readiness to collect demographic and business revenue data.
  • The comment period is open; community banks are encouraged to submit feedback.

CCI will continue to monitor this rulemaking and share updates. For questions or assistance evaluating your potential coverage, please contact us at inquiries@completecompli.com.

 

Victoria Peterson, CCBCO