Author: Steve Shepherd, CRCM
On June 25, 2024, the CFPB issued an interim final rule which extended the compliance dates set forth in the 2023 Section 1071 Small Business Lending Rule to account for the court orders in ongoing litigation between certain stakeholders and the CFPB (CFPB vs CFSA). On May 16, 2024, the Supreme Court reversed the Fifth Circuit’s ruling in the case requiring the CFPB to extend plaintiffs’ and their members’ deadlines for compliance by 290 days to compensate for the period stayed.
The interim final rule provides the table below to summarize the changes.
On June 25, 2024, the CFPB issued an interim final rule which extended the compliance dates set forth in the 2023 Section 1071 Small Business Lending Rule to account for the court orders in ongoing litigation between certain stakeholders and the CFPB (CFPB vs CFSA). On May 16, 2024, the Supreme Court reversed the Fifth Circuit’s ruling in the case requiring the CFPB to extend plaintiffs’ and their members’ deadlines for compliance by 290 days to compensate for the period stayed.
The interim final rule provides the table below to summarize the changes.
Lenders with the highest volume thresholds (2,500 or more covered originations) must begin collecting information by July 18, 2025, and submit by June 1, 2026. The lenders who meet the moderate threshold of data (500 to 2,499 covered originations) must begin collecting information by January 16, 2026. The low volume lenders (100 to 499 covered originations) must begin collecting information by October 18, 2026. Moderate and low volume lenders must report their data by June 1, 2027.
Per the interim final rule, covered financial institutions are permitted to continue using their small business originations from 2022 and 2023 to determine their compliance tier, or they may use their originations from 2023 and 2024. Covered financial institutions are permitted to begin collecting protected demographic data required under the 2023 final rule 12 months before their new compliance date in order to assess their procedures and systems. As illustrated above, the deadline for submitting small business lending data will remain June 1 following the calendar year for which data is collected.
As this is an interim final rule, the CFPB is seeking comment. For more information, please see the CFPB news release on the Interim Final Rule: https://www.consumerfinance.gov/about-us/newsroom/cfpb-extends-compliance-dates-for-small-business-lending-rule/
Per the interim final rule, covered financial institutions are permitted to continue using their small business originations from 2022 and 2023 to determine their compliance tier, or they may use their originations from 2023 and 2024. Covered financial institutions are permitted to begin collecting protected demographic data required under the 2023 final rule 12 months before their new compliance date in order to assess their procedures and systems. As illustrated above, the deadline for submitting small business lending data will remain June 1 following the calendar year for which data is collected.
As this is an interim final rule, the CFPB is seeking comment. For more information, please see the CFPB news release on the Interim Final Rule: https://www.consumerfinance.gov/about-us/newsroom/cfpb-extends-compliance-dates-for-small-business-lending-rule/
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