On March 30, 2023, the Consumer Financial Protection Bureau (CFPB) issued a final rule amending Regulation B to implement Section 1071 of the Dodd-Frank Act, also known as the Small Business Data Collection Act. It applies to Banks, Credit Unions and Fin-Techs that originated at least 100 covered originations in each of the two preceding calendar years.

Data must be collected and reported on by small businesses, which are defined as a business which had $5 million or less in gross annual revenue for its preceding fiscal year. Covered credit transactions need to be reported on which includes transactions made to a small business, specifically loans, lines of credit, credit cards, merchant cash advances, and credit products used for agricultural purposes. Credit transactions that are excluded from reporting requirements are trade credit, public utilities credit, securities credit, incidental credit, transaction that are reportable under HMDA, insurance premium financing, factoring, leases, consumer designated credit that is used for business or agricultural purposes, letters of credit, and purchases of originated covered credit transactions.

A covered application which triggers data collection, reporting, and related requirements when submitted by a small business is defined as an oral or written request for a covered credit transaction that is made in accordance with procedures used by a financial institution for the type of credit requested. Application types which are excluded are reevaluation, extension, or renewal requests on existing business credit accounts, unless the request seeks additional credit amounts; inquiries and prequalification requests; solicitations, firm offers of credit, and other evaluations that the financial institution initiates, unless the financial institution invites the business to apply. Effective Dates are rolled out in the following phases:

  • October 1, 2024, if it originated at least 2,500 covered originations in both 2022 and 2023
  • April 1, 2025, if it originated at least 500 covered originations in both 2022 and 2023
  • January 1, 2026, if it originated at least 100 covered originations in both 2024 and 2025

Specific data point requirements can be found within the CFPB data points chart.

For more information on Section 1071, click here to watch BAI’s webinar: HMDA for business, Section 1071: Small business lending data collection rule and its implications.