ABA Applauds Congressional Disapproval of CFPB Section 1071 Final Rule

“We applaud House lawmakers for today’s bipartisan vote making clear a strong majority in Congress disapproves of the CFPB’s Section 1071 final rule, which will require banks to report 81 data fields on small business applications for credit. Given the similar bipartisan vote in the Senate, President Biden should recognize that Congress has spoken and rejects the CFPB’s flawed rule given the harm it would cause small businesses across the country and the banks that support them.

“To be clear, America’s banks firmly support the goals of Section 1071 and the enforcement of the nation’s fair lending laws, but as we have said before, the rule as written is too far-reaching. It will harm the relationship banking model Director Chopra often praises and actually discourage bank lending to small businesses given the cost to collect this data. No one should want that outcome. We are also concerned that the publication of this data will put small businesses’ privacy at risk.

“Now is the time for the CFPB to work with all stakeholders to revise this rule in a way that actually incentivizes bank lending to all small businesses. As Congress has now made clear, the Bureau can and should do better.”