Committee hears industry complaints about CFPB’s Section 1071 small-business data rule; lawmakers press for repeal or revision
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Summary
Industry witnesses and several Republican members said the CFPB’s 1071 small-business lending data rule—expanding required data fields from 13 to 81—will raise compliance costs and reduce small-business lending; some members said repeal is warranted.
Members of the subcommittee and several witnesses criticized the CFPB’s Section 1071 small-business lending rule for expanding the number of required data fields and for its potential effect on small lenders and minority depository institutions.
Representative Roger Williams and others said the rule imposes “a mountain of compliance burdens” and will reduce loan availability and increase loan cost for small businesses. David Pomeran of the Consumer Bankers Association said the rule’s expansion from an original 13 data fields to 81 (as stated in testimony) invited litigation and uncertainty and risked driving smaller lenders from the market.
Anna Fonseca, president and CEO of Logix Federal Credit Union, told the committee that compliance with the rule would limit the credit union’s ability to make small-business loans and urged repeal or significant revision. Representative Williams said he had introduced the “1071 repeal protect small business lending act” to repeal the rule; Representative Delacruz and others said repeal would particularly help minority and community lenders in their districts.
Witnesses and members debated whether the rule’s data requirements were justified by demonstrated market failure. Industry witnesses called for either repeal or rescission and for a more tailored approach; supporters of the CFPB’s rule were not present to testify at the hearing.
The subcommittee did not vote on repeal at the hearing.