The Consumer Financial Protection Bureau published an interim final rule to extend its 1071 small-business reporting rule’s compliance and reporting dates.
Court Actions: As a result of three ongoing legal challenges to the 2023 final rule, some institutions—including all ICBA members—are protected by court orders that temporarily stay the rule’s compliance deadlines.
The U.S. Court of Appeals for the Fifth Circuit has stayed the rule and tolled the compliance deadlines for plaintiffs and intervenors until further order of the court, with all ICBA members protected by this stay.
The U.S. District Court for the Eastern District of Kentucky has stayed the deadlines for plaintiffs in that case until further order of the court.
The U.S. District Court for the Southern District of Florida has stayed the rule and tolled the rule’s compliance deadlines for plaintiffs and their members for as long as ICBA’s Fifth Circuit stay order is in effect, subject to modification at any time by the court.
New Extension: For lenders that are not members of ICBA and are not otherwise protected by any of the three orders, the CFPB is adopting an interim final rule to extend compliance dates by 350 days to facilitate consistent compliance across all covered financial institutions. The CFPB, in the interim, may issue a new proposed 1071 rule to reconsider certain aspects of the 2023 rule.
Background: The CFPB’s rule—issued in March 2023—requires lenders to collect and report data on credit applicants, including the race, sex, and ethnicity of the principal owners as well as gross annual revenue.
Pending Legislation: The House Financial Services Committee in April advanced the ICBA-advocated 1071 Repeal to Protect Small Business Lending Act to repeal the statute that underlies the CFPB rule. Further, Chairman French Hill’s (R-Ark.) ICBA-advocated Small LENDER Act (H.R. 941) would mitigate the impact of the 1071 rule by exempting more community banks and small businesses.
