{"id":289010,"date":"2026-06-10T11:14:49","date_gmt":"2026-06-10T15:14:49","guid":{"rendered":"https:\/\/ncrc.org\/?p=289010"},"modified":"2026-06-10T12:02:58","modified_gmt":"2026-06-10T16:02:58","slug":"ncrc-analysis-of-the-cfpbs-section-1071-rule-of-2026","status":"publish","type":"post","link":"https:\/\/ncrc.org\/ncrc-analysis-of-the-cfpbs-section-1071-rule-of-2026\/","title":{"rendered":"NCRC Analysis of the CFPB\u2019s Section 1071 Rule of 2026"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"289010\" class=\"elementor elementor-289010\" data-elementor-post-type=\"post\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-55a8589 elementor-section-height-min-height elementor-section-stretched elementor-section-boxed elementor-section-height-default elementor-section-items-middle\" data-id=\"55a8589\" data-element_type=\"section\" data-e-type=\"section\" data-settings=\"{&quot;stretch_section&quot;:&quot;section-stretched&quot;,&quot;jet_parallax_layout_list&quot;:[{&quot;jet_parallax_layout_image&quot;:{&quot;url&quot;:&quot;&quot;,&quot;id&quot;:&quot;&quot;,&quot;size&quot;:&quot;&quot;},&quot;_id&quot;:&quot;b77f70d&quot;,&quot;jet_parallax_layout_image_tablet&quot;:{&quot;url&quot;:&quot;&quot;,&quot;id&quot;:&quot;&quot;,&quot;size&quot;:&quot;&quot;},&quot;jet_parallax_layout_image_mobile&quot;:{&quot;url&quot;:&quot;&quot;,&quot;id&quot;:&quot;&quot;,&quot;size&quot;:&quot;&quot;},&quot;jet_parallax_layout_speed&quot;:{&quot;unit&quot;:&quot;%&quot;,&quot;size&quot;:50,&quot;sizes&quot;:[]},&quot;jet_parallax_layout_type&quot;:&quot;scroll&quot;,&quot;jet_parallax_layout_direction&quot;:&quot;1&quot;,&quot;jet_parallax_layout_fx_direction&quot;:null,&quot;jet_parallax_layout_z_index&quot;:&quot;&quot;,&quot;jet_parallax_layout_bg_x&quot;:50,&quot;jet_parallax_layout_bg_x_tablet&quot;:&quot;&quot;,&quot;jet_parallax_layout_bg_x_mobile&quot;:&quot;&quot;,&quot;jet_parallax_layout_bg_y&quot;:50,&quot;jet_parallax_layout_bg_y_tablet&quot;:&quot;&quot;,&quot;jet_parallax_layout_bg_y_mobile&quot;:&quot;&quot;,&quot;jet_parallax_layout_bg_size&quot;:&quot;auto&quot;,&quot;jet_parallax_layout_bg_size_tablet&quot;:&quot;&quot;,&quot;jet_parallax_layout_bg_size_mobile&quot;:&quot;&quot;,&quot;jet_parallax_layout_animation_prop&quot;:&quot;transform&quot;,&quot;jet_parallax_layout_on&quot;:[&quot;desktop&quot;,&quot;tablet&quot;]}],&quot;background_background&quot;:&quot;classic&quot;}\">\n\t\t\t\t\t\t\t<div class=\"elementor-background-overlay\"><\/div>\n\t\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-no\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-cb32b64\" data-id=\"cb32b64\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-baea8e4 elementor-widget elementor-widget-heading\" data-id=\"baea8e4\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h1 class=\"elementor-heading-title elementor-size-default\">NCRC Analysis of the CFPB\u2019s Section 1071 Rule of 2026<\/h1>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-eedc633 elementor-widget elementor-widget-text-editor\" data-id=\"eedc633\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>June 2026<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t<div class=\"elementor-element elementor-element-bcc17b6 e-flex e-con-boxed e-con e-parent\" data-id=\"bcc17b6\" data-element_type=\"container\" data-e-type=\"container\" data-settings=\"{&quot;jet_parallax_layout_list&quot;:[]}\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t<div class=\"elementor-element elementor-element-b1efc02 e-con-full e-flex e-con e-child\" data-id=\"b1efc02\" data-element_type=\"container\" data-e-type=\"container\" data-settings=\"{&quot;jet_parallax_layout_list&quot;:[]}\">\n\t\t\t\t<div class=\"elementor-element elementor-element-de331d5 elementor-widget elementor-widget-off-canvas\" data-id=\"de331d5\" data-element_type=\"widget\" data-e-type=\"widget\" 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elementor-size-sm\" href=\"#elementor-action%3Aaction%3Doff_canvas%3Aopen%26settings%3DeyJpZCI6ImRlMzMxZDUiLCJkaXNwbGF5TW9kZSI6Im9wZW4ifQ%3D%3D\">\n\t\t\t\t\t\t<span class=\"elementor-button-content-wrapper\">\n\t\t\t\t\t\t\t\t\t<span class=\"elementor-button-text\">Download Analysis<\/span>\n\t\t\t\t\t<\/span>\n\t\t\t\t\t<\/a>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-68c744f elementor-widget elementor-widget-text-editor\" data-id=\"68c744f\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p class=\"p1\"><strong>Josh Silver,<\/strong> <em>Senior Fellow<\/em><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-f0c0f3e elementor-widget elementor-widget-heading\" data-id=\"f0c0f3e\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Introduction<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-2ac45c3 elementor-widget__width-initial elementor-widget elementor-widget-text-editor\" data-id=\"2ac45c3\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p style=\"font-weight: 400;\">As part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Section 1071 mandated the collection of several data points associated with small business lending. These include demographic data and data on loan characteristics and actions. The purpose of the data collection according to the text of Section 1071 was to \u201cfacilitate enforcement of fair lending laws and enable communities, governmental entities, and creditors to identify business and community development needs and opportunities of women-owned, minority-owned, and small businesses.\u201d<a href=\"#_ftn1\" name=\"_ftnref1\">[1]<\/a><\/p><p style=\"font-weight: 400;\">To achieve these statutory purposes, the Consumer Financial Protection Bureau (CFPB) promulgated a rule implementing Section 1071 in 2023 that would have required collection and dissemination of robust data. Section 1071 required the collection of data on the characteristics of the small business loan applicant, including the race and gender of the owner(s) as well as loan characteristics and actions, such as approval or rejection. In addition to the data collection required by the statute, Section 1071 provided the CFPB with the discretion to collect additional data points that would further the purpose of the statute.<\/p><p style=\"font-weight: 400;\">Using the discretionary authority under Section 1071, the CFPB in its 2023 rule added pricing information and more characteristics of the small businesses, including the number of years in existence and the number of employees. In its 2026 rule, the CFPB retained the mandatory data points but deleted most of the discretionary data points. This will impair the ability of the Section 1071 data to achieve the fair lending and community development purposes of Dodd-Frank. For example, the pricing data combined with more information on the characteristics of the small businesses would have provided insights into whether businesses that are similarly situated except for when the gender and\/or race of the owners were treated the same in terms of price and access to loans.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-1b131b5 elementor-widget elementor-widget-heading\" data-id=\"1b131b5\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Rationale for the 2026 Rule\u2019s Reduction in Data is Flawed<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-e67215d elementor-widget__width-initial elementor-widget elementor-widget-text-editor\" data-id=\"e67215d\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p style=\"font-weight: 400;\">The CFPB\u2019s 2026 rule maintained that the purposes of Section 1071 were best achieved by a lean database with relatively few data points that were well-defined and could be collected readily by lenders. According to the CFPB, \u201cat the onset of a potentially long-term data collection regime, it should start with more modest requirements, focusing on core lending products, lenders, and data.\u201d The agency stated further that \u201ca longer-term approach to advance the statutory purposes of section 1071 is to commence the collection of data with a narrower scope to ensure its quality and to limit, as much as possible, any disturbance of the provision and availability of credit to small businesses. The statutory purposes of the rule are not well served by an expansive rule that could create disruptions in small business lending markets.\u201d<a href=\"#_ftn2\" name=\"_ftnref2\">[2]<\/a><\/p><p style=\"font-weight: 400;\">Throughout the preamble of the 2026 rule, the agency raised concerns about the expense of collecting several data points and suggested that the cost would be so high that lenders would reduce the volume of their small business lending. The agency pointed to the experience of the collection of Home Mortgage Disclosure Act (HMDA) data to support its position that it was best to start with modest data collection and then incrementally add more data over several years.<\/p><p style=\"font-weight: 400;\">As NCRC maintained in its comment letter, the analogy with HMDA is not applicable. Congress passed HMDA in 1975 when computing power was considerably less sophisticated than it is today. Hence, the Federal Reserve Board, the agency implementing the HMDA regulation for several years, adopted an incremental approach. For example, the Federal Reserve introduced pricing information in the early 2000\u2019s, more than 25 years after Congress passed HMDA.<\/p><p style=\"font-weight: 400;\">In the implementation of Section 1071, lenders and the CFPB can learn from the HMDA experience to more readily implement similar data points concerning pricing and loan characteristics. More sophisticated data software should facilitate data collection that could not be as easily executed in the 1970s, or even the 1990s.<\/p><p style=\"font-weight: 400;\">The CFPB\u2019s own estimates of cost in the final rule suggests that lenders will not confront such high costs that they will need to significantly reduce their lending. After the reductions in data collection instituted by the 2026 rule, the CFPB calculated that lenders would save just $1 to $8 per application, depending on their loan volume.<a href=\"#_ftn3\" name=\"_ftnref3\">[3]<\/a>\u00a0\u00a0Under its 2023 rule, the CFPB estimated that per application ongoing costs ranged from $8 to $34, depending on the number of loans issued by the lender.<a href=\"#_ftn4\" name=\"_ftnref4\">[4]<\/a>\u00a0Comparing the original CFPB estimates for the per application costs with the savings in the 2026 rule illustrates that overall data collection costs are small and the savings achieved by reducing the data collection are even smaller. This casts doubt regarding the agency\u2019s central rationale that reducing data and costs would avoid reductions in lending.<\/p><p style=\"font-weight: 400;\">A rationale for a comprehensive Section 1071 database was to save costs for banks by deleting their requirements to submit small business and small farm lending data required under the regulations implementing the Community Reinvestment Act (CRA). For banks that had reporting requirements under Section 1071, the 2023 final rule relieved them of data reporting responsibilities under the CRA. After replacing the 2023 rule with the 2026 rule, the CFPB reinstated data reporting under the CRA and Section 1071 for these banks. For these lenders, the duplicative reporting requirements are likely to eliminate the modest savings achieved by the 2026 rule\u2019s paring back of Section 1071 data.<\/p><p style=\"font-weight: 400;\">The same logic would apply to Farm Credit System (FCS) lenders. If the Farm Credit Administration (FCA) had worked with the CFPB to eliminate or reduce FCA data reporting requirements, the FCS lenders would have reduced their costs. Capturing their lending under Section 1071 would have been preferable to a separate FCA database since data users could more readily compare their lending to other agricultural lenders. Instead, by deleting FCS lenders from the Section 1071 data, the CFPB missed an opportunity to reduce costs for FCS lenders and to establish a more comprehensive database.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-7848df8 elementor-widget elementor-widget-heading\" data-id=\"7848df8\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Reduction in Number of Lenders and Loans Compromises the Section 1071 Data<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-20a3e13 elementor-widget__width-initial elementor-widget elementor-widget-text-editor\" data-id=\"20a3e13\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p style=\"font-weight: 400;\">A detrimental aspect of the CFPB\u2019s 2026 rule was eliminating data reporting for thousands of lending institutions by exempting lenders that issued less than 1,000 loans annually. The previous threshold was 100 loans in the 2023 rule. Under the 2023 rule, the CFPB estimated about 1,700 depository institutions would have been covered, or approximately 17 percent of such institutions (banks, thrifts and credit unions).<a href=\"#_ftn5\" name=\"_ftnref5\">[5]<\/a>\u00a0After implementation of the 2026 rule, only 181 depository institutions, or just about 2 percent of all depository institutions, remain covered.<a href=\"#_ftn6\" name=\"_ftnref6\">[6]<\/a>\u00a0For context, approximately 4,279 banks and thrifts conduct business in the United States.<a href=\"#_ftn7\" name=\"_ftnref7\">[7]<\/a><\/p><p style=\"font-weight: 400;\">The rule would also result in miniscule coverage of credit unions. The CFPB estimated that only 5 credit unions would be covered, or one tenth of one percent, of all credit unions under the 2026 rule.<a href=\"#_ftn8\" name=\"_ftnref8\">[8]<\/a>\u00a0Likewise, the reductions in the number of non-depository institutions reporting are steep. The 2026 rule reduced the number of non-depository institutions reporting data from about 610 to 31.<a href=\"#_ftn9\" name=\"_ftnref9\">[9]<\/a><\/p><p style=\"font-weight: 400;\">The CFPB justified the reduction in the number of lenders by asserting that more than 90 percent of depository institutions\u2019 lending would still be covered.<a href=\"#_ftn10\" name=\"_ftnref10\">[10]<\/a>\u00a0A critical aspect of the new rule, according to the CFPB, was that core lenders responsible for most lending activity were still covered. In contrast, the smaller lenders that would face the most costs were now exempt. However, the estimated costs were small for all lenders as discussed above.<\/p><p style=\"font-weight: 400;\">In addition, as described in more detail below, the CFPB\u2019s estimate that 90 percent of depository institutions\u2019 lending would be covered is probably a considerable overestimate. Nevertheless, justifying a rule that will obscure lending trends in several counties across the country by asserting that most lending is still covered is disingenuous. One of the major purposes of the statute is to reveal whether community needs for credit are being met. A rule that does not facilitate investigation into credit needs for several geographical areas is not consistent with the purposes of the statute.\u00a0<\/p><p style=\"font-weight: 400;\">Moreover, the concept of core lenders is misapplied. For smaller metropolitan areas and rural counties, the smaller lenders that the agency may not consider \u201ccore\u201d lenders are quite important because small businesses rely upon them for service. Smaller banks excel at small business lending because they have firsthand knowledge of small businesses and have unique insights into judging their creditworthiness that quantitative underwriting used by larger lenders may lack. Exempting them from reporting data requirements misses a critical part of the market in medium size and smaller communities and thus prevents the Section 1071 data from assessing whether community needs continue to be met in these communities. In fact, NCRC\u2019s spatial analysis in our comment letter on the proposed 2026 rule showed that counties experiencing sizable reductions in the percentage of reported loans (of at least 20 percent of loans issued in 2024) were clustered in the Midwest, mountain states and Appalachia.<a href=\"#_ftn11\" name=\"_ftnref11\">[11]<\/a><\/p><p style=\"font-weight: 400;\">The CFPB itself acknowledged that under its 2026 rule, \u201c25 percent of rural depository institution branches and about 63 percent of non-rural depository institution branches would be covered under the proposed rule (finalized in 2026). Under the baseline (in the 2023 rule), the Bureau estimates that about 65 to 68 percent of rural depository institution branches and about 84 to 85 percent of non-rural depository institution branches are covered.\u201d The loss of coverage in rural and smaller communities is significant as the agency itself acknowledged.<a href=\"#_ftn12\" name=\"_ftnref12\">[12]<\/a><\/p><p style=\"font-weight: 400;\">This reduction in Section 1071 coverage was similar to the CFPB\u2019s decision to reduce coverage under the Home Mortgage Disclosure Act (HMDA) data that was overturned in a court case. In ruling against the CFPB in 2022 in a case involving raising the HMDA threshold for reporting institutions from 25 to 100 closed end loans, Chief Judge<strong>\u00a0<\/strong>Beryl A. Howell\u00a0stated that \u201cAn agency acts arbitrarily and capriciously when it \u2018entirely fail[s] to consider an important aspect of the problem,\u2019 offers an explanation for its decision that \u2018runs counter to the evidence before the agency.\u2019\u201d<a href=\"#_ftn13\" name=\"_ftnref13\">[13]<\/a><\/p><p style=\"font-weight: 400;\">She further explained that \u201c\u2026rather than look to gross transaction numbers as CFPB does, plaintiffs\u2019 focus on the financial institutions newly exempt is more probative of the impact of the 2020 Rule on the ability of regulatory agencies, policymakers and HMDA users to identify problematic home lending practices at a community level, in furtherance of the statute\u2019s express goals.\u201d<a href=\"#_ftn14\" name=\"_ftnref14\">[14]<\/a>\u00a0The same reasoning applies in this matter since Section 1071 of the Dodd Frank law stipulates that the data must further the objectives of fair lending and community development.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-f829c0c elementor-widget elementor-widget-heading\" data-id=\"f829c0c\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Exemption for Merchant Cash Advance and Agricultural Lending Obscures Important Parts of the Marketplace<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-4b97629 elementor-widget__width-initial elementor-widget elementor-widget-text-editor\" data-id=\"4b97629\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p style=\"font-weight: 400;\">Like the exemption of most lenders from reporting requirements, the exemption of significant types of lending prevents an accurate depiction of the lending marketplace. The 2026 rule, for example, deletes the requirement that Merchant Cash Advances (MCAs) be reported. MCAs are agreements under which a lender will provide an upfront lump sum to a small business in return for regular payments out of monthly small business receipts. As NCRC\u2019s comment letter documented, MCAs are difficult for small businesses to understand, making them vulnerable to abusive lending.<a href=\"#_ftn15\" name=\"_ftnref15\">[15]<\/a><\/p><p style=\"font-weight: 400;\">The CFPB acknowledged the growing role of MCAs in the marketplace, citing projections of almost $33 billion in MCAs by 2032.<a href=\"#_ftn16\" name=\"_ftnref16\">[16]<\/a>\u00a0The CFPB further stated that \u201cThe Bureau acknowledges the concern by some commenters that excluding MCAs may obscure risks to small business that use MCAs and reduce market transparency.\u201d<a href=\"#_ftn17\" name=\"_ftnref17\">[17]<\/a>\u00a0Nevertheless, the CFPB decided that requiring the disclosure of MCAs could include some forms of MCAs that are not loans or closely resemble credit.<a href=\"#_ftn18\" name=\"_ftnref18\">[18]<\/a>\u00a0This rationale is unconvincing considering the several years the agency examined MCAs and had decided how to capture MCAs that were loans in the final 2023 rule.<\/p><p style=\"font-weight: 400;\">The CFPB also employed a suspect rationale for excluding agricultural loans from Section 1071 reporting. It claimed that underwriting is so different for agricultural lending that it could not be meaningfully compared to non-agricultural lending. The agency stated, \u201cAgricultural loans are often secured by biological-based assets, such as crops or livestock, which are subject to variables and risk from weather and disease. These characteristics create unique underwriting challenges that make such loans difficult to compare to those in other industries.\u201d<a href=\"#_ftn19\" name=\"_ftnref19\">[19]<\/a><\/p><p style=\"font-weight: 400;\">Yet, the CRA regulation has mandated reporting and disclosure of farm lending for decades. It is understandable for the public and analysts to separately consider farm lending since the data has a variable indicating whether the loan is farm lending or small business lending. The rationale concerning the difficulty of comparisons seems at best a minor difficulty, especially compared against the greater loss of data revealing whether underserved farmers, including minority or women farmers, are now receiving farm loans. Moreover, by exempting agriculture lending from Section 1071, the CFPB prevents the public from observing on a per application basis the demographics of the farms that banks are approving and rejecting for loans.\u00a0\u00a0<\/p><p style=\"font-weight: 400;\">In addition to exempting banks from reporting agricultural loans, the CFPB effectively exempted non-bank Farm Credit System (FCS) lenders from disclosure requirements although these FCS lenders are cooperatives and serve important market niches. As non-banks, FCS lending data does not appear in the CRA data. Nonetheless, they should not have difficulty reporting data since they are already required to do so by their regulator: the FCA.<a href=\"#_ftn20\" name=\"_ftnref20\">[20]<\/a>\u00a0However, the FCA does not make the data publicly available and does not report demographic information on a per application basis, which is what the Section 1071 data requires.<a href=\"#_ftn21\" name=\"_ftnref21\">[21]<\/a>\u00a0Overall, it is not sufficient to claim that CRA data provides a comprehensive picture of agricultural lending because the CRA data does not include FCS and other non-bank lenders that have important niches in the marketplace.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-9bd223b elementor-widget elementor-widget-heading\" data-id=\"9bd223b\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">CFPB\u2019s Definition of Small Business Reduces Loan Data by Up to Half<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-cc11161 elementor-widget__width-initial elementor-widget elementor-widget-text-editor\" data-id=\"cc11161\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p style=\"font-weight: 400;\">The CFPB further limited the usefulness of the Section 1071 database by its definition of small businesses, which results in even fewer loans being reported. The 2023 rule had defined a small business as one with up to $5 million in revenue. The 2026 rule reduced the revenue threshold to $1 million.<\/p><p style=\"font-weight: 400;\">The CFPB disputed NCRC\u2019s assertion that adopting a revenue threshold of $1 million would significantly reduce the size of the loan database. In our comment letter on the proposed 2026 rule, NCRC calculated that changing the threshold from $5 million to $1 million would reduce the number of loans in the Section 1071 database by about half over a several year period.<a href=\"#_ftn22\" name=\"_ftnref22\">[22]<\/a>\u00a0Challenging this assertion, the CFPB cited a study stating that existing CRA small business data excludes loans above $1 million and thus may omit several loans to the smallest businesses. Yet, the CFPB offered no reliable estimates of how many larger loans above $1 million went to businesses with revenues under $1 million and how many went to businesses with revenues between $1 million and $5 million.<a href=\"#_ftn23\" name=\"_ftnref23\">[23]<\/a><\/p><p style=\"font-weight: 400;\">It is thus not possible to recalculate NCRC\u2019s estimate that up to half the loans would be lost by the change in the definition of small businesses. It is unlikely, however, that a disproportionate number of loans greater than $1 million went to businesses with less than $1 million in revenue. Therefore, NCRC\u2019s estimate probably would not change significantly if data on loans above $1 million were available. Even considering the study cited by the CFPB, a reasonable conclusion remains that the Section 1071 database would be significantly reduced by the changed definition of a small business. This means that the database would be less able to depict lending trends and outcomes to small businesses with various revenue sizes.<\/p><p style=\"font-weight: 400;\">While the smallest businesses under $1 million are likely to be the most disadvantaged in the marketplace, it is likely that those with revenues between $1 million and $5 million also confront obstacles to credit. Disagreeing with this, the CFPB stated, \u201cBusinesses above that threshold ($1 million) are likely to be well capitalized and less likely to face undue barriers to credit, even if they may still be transitioning between early stages of growth, as some commenters assert.\u201d<a href=\"#_ftn24\" name=\"_ftnref24\">[24]<\/a>\u00a0A NCRC study found that 35 percent of the businesses loan applicants with revenues between $500,000 and $1 million and 55 percent of the businesses with revenues between $1 million and $5 million received loans in Appalachia.<a href=\"#_ftn25\" name=\"_ftnref25\"><sup>[25]<\/sup><\/a>\u00a0While approval rates are higher for businesses with more revenue, those with under $5 million in revenue still confronted a high denial rate of 45 percent. It would have been valuable to use the Section 1071 data containing information on businesses with up to $5 million in revenue size to assess whether the disparities in approval or denial rates for businesses with different revenue sizes narrow over time and, if not, what policy or programmatic steps could be undertaken to reduce the disparities.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-4d29b48 elementor-widget elementor-widget-heading\" data-id=\"4d29b48\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Several Characteristics of Small Businesses and Pricing Data Eliminated<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-d4b3565 elementor-widget__width-initial elementor-widget elementor-widget-text-editor\" data-id=\"d4b3565\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p style=\"font-weight: 400;\">The CFPB\u2019s decision to eliminate several data points concerning the characteristics of small businesses substantially limits the ability of the data to assess whether different subgroups of small businesses receive loans. These deletions will impair investigations into community needs and credit gaps. It will also frustrate fair lending analyses assessing whether businesses with similar characteristics &#8211; but under control of owners of various races and genders &#8211; have similar access to loans and receive similar fees and interest rates when approved for loans.<\/p><p style=\"font-weight: 400;\">For example, the CFPB deleted disaggregated race and ethnicity categories. The 2023 final rule\u00a0established subcategories for Hispanics, Asians, African Americans, Native\u00a0Hawaiian and other Pacific Islanders. HMDA data for the disaggregated race and ethnicity categories has revealed fair lending concerns and significant differences in access to credit for racial and ethnic subcategories. With the CFPB eliminating these categories for the small business data, stakeholders will not be able to determine whether there are similar differences in access to credit for various racial and ethnic small businesses.<\/p><p style=\"font-weight: 400;\">The CFPB claimed that loan applicants would be reluctant to disclose racial and ethnic subcategories.<a href=\"#_ftn26\" name=\"_ftnref26\">[26]<\/a>\u00a0However, studies on HMDA data submissions revealed that the subcategories were popular with loan applicants and were not onerous for lenders. A 2018 revision to HMDA allowed Latino, Asian, Hawaiian and Pacific Islander applicants to report more precisely on their country or place of origin. Among eligible 2021 applicants, over 60 percent utilized these optional fields to specify their identity.<a href=\"#_ftn27\" name=\"_ftnref27\"><sup>[27]<\/sup><\/a><\/p><p style=\"font-weight: 400;\">Other business characteristics deleted from the 2026 rule include the LGBTQ status of the small business owners and the number of workers in the small business.<a href=\"#_ftn28\" name=\"_ftnref28\">[28]<\/a>\u00a0These deletions will further diminish the ability of the data to access whether LGBTQ and the smallest businesses with one or no employees have access to credit.<\/p><p style=\"font-weight: 400;\">The 2026 rule retained information on the number of years a small business is in operation, the number of principal owners and the North American Industrial Classification (NAICs) code of the small business, which indicates the type and sector of the small business.<a href=\"#_ftn29\" name=\"_ftnref29\">[29]<\/a>\u00a0The CFPB\u2019s decision to retain these data points while deleting other important data points on business characteristics further illustrates the inconsistent treatment of variables in the 2026 rule. The agency judged some variables as important and straightforward to collect while considering others as not precise or difficult to collect without clearly describing differences among the data variables on these criteria.\u00a0\u00a0<\/p><p style=\"font-weight: 400;\">The 2023 rule included data on pricing including information on fees and interest rates. The 2026 rule eliminated pricing information as too complex and costly to collect although the CFPB acknowledged its value in fair lending analysis.<a href=\"#_ftn30\" name=\"_ftnref30\">[30]<\/a>\u00a0It cited HMDA\u2019s incremental introduction of price data over several years. However, the analogy is misapplied since several lenders have now had experience with pricing data and computer technology is vastly improved. Rather than choose a more limited but useful disclosure of price data, the CFPB opted for the more drastic option of eliminating all pricing data to the detriment of the usefulness of the data.\u00a0<\/p><p style=\"font-weight: 400;\">Along with the elimination of pricing, the CFPB deleted application method (online, phone, or in-person), application recipient (lender or third party) and denial reasons from the data.<a href=\"#_ftn31\" name=\"_ftnref31\">[31]<\/a>\u00a0These data points would have enhanced fair lending analyses by describing whether pricing or denial reasons had varied by how the application was processed and received. Combined with enhanced data on business characteristics, the pricing and application method data would have provided a fuller picture regarding whether businesses with similar characteristics and methods of applying were being treated comparably in terms of price and access to credit. Under the 2026 rule\u2019s deletions, the CFPB forfeited an important opportunity to more rigorously investigate fair lending concerns and enforce fair lending laws.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-2db8693 elementor-widget elementor-widget-heading\" data-id=\"2db8693\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Public Dissemination of the Data Delayed<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-05d49e1 elementor-widget__width-initial elementor-widget elementor-widget-text-editor\" data-id=\"05d49e1\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">The CFPB delayed the date under which lenders must start data collection until January 1, 2028.<\/span><a style=\"font-weight: 400;\" href=\"#_ftn32\" name=\"_ftnref32\">[32]<\/a><span style=\"font-weight: 400;\">\u00a0Lenders must then submit the data to the CFPB by June 1, 2029. When the CFPB has the first years\u2019 worth of data by the summer of 2029, the agency will analyze it and then release a request for public comments on a proposed rulemaking indicating which variables will be publicly disclosed and whether any of them will be modified before disclosure.<\/span><a style=\"font-weight: 400;\" href=\"#_ftn33\" name=\"_ftnref33\">[33]<\/a><span style=\"font-weight: 400;\">\u00a0Since rulemaking generally occurs over a period of several months, it is possible that the public will not access data until 2030, which is 20 years after the Dodd-Frank Wall Street Reform and Consumer Protection Act passed in 2010. The two-decade delay is not consistent with the objectives of public accountability through data disclosure improving fair lending and community development outcomes.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-822fd97 elementor-widget elementor-widget-heading\" data-id=\"822fd97\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Conclusion<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-6ab3f01 elementor-widget__width-initial elementor-widget elementor-widget-text-editor\" data-id=\"6ab3f01\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>The CFPB\u2019s 2026 rule regarding Section 1071 data eliminates reporting requirements for thousands of lending institutions and reduces the amount of data reported by up to one half. Significant gaps in terms of identifying lending patterns, particularly in smaller metropolitan areas and rural counties, will result contrary to the community development and fair lending purposes of the statute. The CFPB failed to offer a convincing case that the 2026 rule\u2019s reductions of data reporting were justified by cost or would prevent significant numbers of lenders from exiting the small business lending market. The fair lending value of the data is further diminished by the elimination of several characteristics of small business applicants, data on loan pricing and application processes. Lastly, the rule will delay public dissemination of the data by a full two decades after the passage of a law mandating data collection transparency.\u00a0<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-ffe6113 elementor-widget-divider--view-line elementor-widget elementor-widget-divider\" data-id=\"ffe6113\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"divider.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-divider\">\n\t\t\t<span class=\"elementor-divider-separator\">\n\t\t\t\t\t\t<\/span>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-3d439d6 elementor-widget__width-initial elementor-widget elementor-widget-text-editor\" data-id=\"3d439d6\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><a href=\"#_ftnref1\" name=\"_ftn1\">[1]<\/a>\u00a0Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No:111-203, 124 Stat. 2057 (2010), Sec. 1071, p. 681, https:\/\/www.congress.gov\/bill\/111th-congress\/house-bill\/4173\/text<\/p><p><a href=\"#_ftnref2\" name=\"_ftn2\">[2]<\/a>\u00a0Consumer Financial Protection Bureau (CFPB), Small Business Lending Under the Equal Credit Opportunity Act (Regulation B), Final Rule, 12 CFR Part 1002, Docket No. CFPB\u20132025\u20130040,\u00a0RIN 3170\u2013AB4, Federal Register, Vol. 91, No. 84, Friday, May 1, 2026, p. 23531<\/p><p><a href=\"#_ftnref3\" name=\"_ftn3\">[3]<\/a>\u00a0CFPB Final Rule, Small Business Lending, May 2026, p. 23592<\/p><p><a href=\"#_ftnref4\" name=\"_ftn4\">[4]<\/a>\u00a0Ibid.<\/p><p><a href=\"#_ftnref5\" name=\"_ftn5\">[5]<\/a>\u00a0Consumer Financial Protection Bureau, Proposed Rule: Small Business Lending Under the Equal Credit Opportunity Act (Regulation B), Docket No. CFPB\u20132025\u20130040, RIN 3170\u2013AB40, Federal Register, Vol. 90, No. 217, Thursday, November 13, 2025, p. 50971<\/p><p><a href=\"#_ftnref6\" name=\"_ftn6\">[6]<\/a>\u00a0https:\/\/ncrc.org\/section1071\/<\/p><p><a href=\"#_ftnref7\" name=\"_ftn7\">[7]<\/a>\u00a0FDIC\u00a0BankFind, count of banks and thrifts as of May 15, 2026, https:\/\/banks.data.fdic.gov\/bankfind-suite\/bankfind<\/p><p><a href=\"#_ftnref8\" name=\"_ftn8\">[8]<\/a>\u00a0CFPB Proposed Rule, Small Business Lending, November 13, p. 50970<\/p><p><a href=\"#_ftnref9\" name=\"_ftn9\">[9]<\/a>\u00a0https:\/\/ncrc.org\/section1071\/<\/p><p><a href=\"#_ftnref10\" name=\"_ftn10\">[10]<\/a>\u00a0CFPB, Final Rule, Small Business Lending, May 2026, p. 23553<\/p><p><a href=\"#_ftnref11\" name=\"_ftn11\">[11]<\/a>\u00a0NCRC Comment Letter on CFPB Proposed Small Business Lending Rule, December 12, 2025, https:\/\/ncrc.org\/ncrcs-comment-on-the-cfpbs-proposed-rule-to-strip-section-1071-data-collection\/<\/p><p><a href=\"#_ftnref12\" name=\"_ftn12\">[12]<\/a>\u00a0CFPB Proposed Rule, Small Business Lending, November 13, 50984<\/p><p><a href=\"#_ftnref13\" name=\"_ftn13\">[13]<\/a>\u00a0Chief Judge Beryl A. Howell,\u00a0Civil Action No. 20-2074\u00a0(BAH), United States District Court for the District of Columbia, NCRC et al. v CFPB, p. 38, https:\/\/law.justia.com\/cases\/federal\/district-courts\/district-of-columbia\/dcdce\/1:2020cv02074\/220484\/26\/<\/p><p><a href=\"#_ftnref14\" name=\"_ftn14\">[14]<\/a>\u00a0Chief Judge Beryl A. Howell,\u00a0Civil Action No. 20-2074, p. 42.<\/p><p><a href=\"#_ftnref15\" name=\"_ftn15\">[15]<\/a>\u00a0NCRC Comment Letter on CFPB Proposed Small Business Lending Rule, December 12, 2025, https:\/\/ncrc.org\/ncrcs-comment-on-the-cfpbs-proposed-rule-to-strip-section-1071-data-collection\/<\/p><p><a href=\"#_ftnref16\" name=\"_ftn16\">[16]<\/a>\u00a0CFPB Final Rule, Small Business Lending, May 2026, p. 23538<\/p><p><a href=\"#_ftnref17\" name=\"_ftn17\">[17]<\/a>\u00a0CFPB Final Rule, Small Business Lending, May 2026, p. 23540<\/p><p><a href=\"#_ftnref18\" name=\"_ftn18\">[18]<\/a>\u00a0CFPB Final Rule, Small Business Lending, May 2026,\u00a0p. 23541<\/p><p><a href=\"#_ftnref19\" name=\"_ftn19\">[19]<\/a>\u00a0CFPB Final Rule, Small Business Lending, May 2026, p.\u00a023543<\/p><p><a href=\"#_ftnref20\" name=\"_ftn20\">[20]<\/a>\u00a0Ibid. Also, it is important to note that the CRA data will not contain information for FCS lenders since they are not banks. The CFPB missed an opportunity to capture FCS lending data under Section 1071.<\/p><p><a href=\"#_ftnref21\" name=\"_ftn21\">[21]<\/a>\u00a0CFPB Final Rule, Small Business Lending, May 2026, p. 23542<\/p><p><a href=\"#_ftnref22\" name=\"_ftn22\">[22]<\/a>\u00a0NCRC Comment Letter on CFPB Proposed Small Business Lending Rule, December 12, 2025, https:\/\/ncrc.org\/ncrcs-comment-on-the-cfpbs-proposed-rule-to-strip-section-1071-data-collection\/<\/p><p><a href=\"#_ftnref23\" name=\"_ftn23\">[23]<\/a>\u00a0CFPB Final Rule, Small Business Lending, May 2026, p. 23581<\/p><p><a href=\"#_ftnref24\" name=\"_ftn24\">[24]<\/a>\u00a0CFPB Final Rule, Small Business Lending, May 2026, p. 23557<\/p><p><a href=\"#_ftnref25\" name=\"_ftn25\">[25]<\/a>\u00a0Josh Silver, Archana Pradhan (NCRC), Spencer Cowan (Woodstock Institute),\u00a0<em>Access to Capital and Credit in Appalachia and the Impact of the Financial Crisis and Recession on Commercial Lending and Finance in the Region<\/em>. Appalachian Regional Commission (ARC), p. 86.\u00a0<a href=\"https:\/\/www.ncrc.org\/access-to-capital-and-credit-in-appalachia-and-the-impact-of-the-financial-crisis-and-recession-on-commercial-lending-and-finance-in-the-region\/\">https:\/\/www.ncrc.org\/access-to-capital-and-credit-in-appalachia-and-the-impact-of-the-financial-crisis-and-recession-on-commercial-lending-and-finance-in-the-region\/<\/a><\/p><p><a href=\"#_ftnref26\" name=\"_ftn26\">[26]<\/a>\u00a0CFPB Final Rule, Small Business Lending, May 2026, p. 23564<\/p><p><a href=\"#_ftnref27\" name=\"_ftn27\">[27]<\/a>\u00a0Seema Agnani and Jason Richardson,\u00a0<a href=\"https:\/\/ncrc.org\/mortgage-lending-in-the-asian-american-and-pacific-islander-community\/\">Mortgage Lending in the Asian American and Pacific Islander Community.<\/a>\u00a0NCRC, August 6, 2020.<\/p><p><a href=\"#_ftnref28\" name=\"_ftn28\">[28]<\/a>\u00a0CFPB Final Rule, Small Business Lending, May 2026, pgs. 23565, 23562<\/p><p><a href=\"#_ftnref29\" name=\"_ftn29\">[29]<\/a>\u00a0CFPB Final Rule, Small Business Lending, May 2026, pgs. 23561, 23562, 23563<\/p><p><a href=\"#_ftnref30\" name=\"_ftn30\">[30]<\/a>\u00a0CFPB Final Rule, Small Business Lending, May 2026, pg. 23560<\/p><p><a href=\"#_ftnref31\" name=\"_ftn31\">[31]<\/a>\u00a0CFPB Final Rule, Small Business Lending, May 2026, pg. 23559<\/p><p><a href=\"#_ftnref32\" name=\"_ftn32\">[32]<\/a>CFPB Final Rule, Small Business Lending, May 2026,\u00a0pg.\u00a023572<\/p><p><a href=\"#_ftnref33\" name=\"_ftn33\">[33]<\/a>\u00a0CFPB Final Rule, Small Business Lending, May 2026,\u00a0pg. 23575<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>NCRC Analysis of the CFPB\u2019s Section 1071 Rule of 2026 June 2026 Complete the form to download the pdf: Yes, send me updates by email about NCRC research, events and news. Download Now Complete the form to download the pdf: Download Analysis Josh Silver, Senior Fellow Introduction As part of the Dodd-Frank Wall Street Reform 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Download Now Complete the form to download the pdf: Download Analysis Josh Silver, Senior Fellow Introduction As part of the Dodd-Frank Wall Street Reform&hellip;","_links":{"self":[{"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/posts\/289010","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/users\/932"}],"replies":[{"embeddable":true,"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/comments?post=289010"}],"version-history":[{"count":0,"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/posts\/289010\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/media\/137667"}],"wp:attachment":[{"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/media?parent=289010"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/categories?post=289010"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ncrc.org\/wp-json\/wp\/v2\/tags?post=289010"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}