Credit unions need to comment on a sweeping proposal that would require financial institutions to collect and report data on the credit applications of small businesses to CFPB. CUNA issued an action alert Tuesday urging credit unions to share their concerns about the proposal. Comments will be due by Jan. 6. 

The new rule, proposed in September, would amend Regulation B to implement changes to the Equal Credit Opportunity Act (ECOA) made by section 1071 of the Dodd-Frank Act. In addition, the Bureau is proposing to require financial institutions to collect and report data on applications for credit for small businesses, including those that are owned by women or minorities. 

Several provisions in the proposed rule would increase credit unions’ reporting burden.  

• A financial institution would be required to comply with the data collection if it originated at least 25 “covered credit transactions” to “small businesses” in each of the two preceding calendar years. 

• Any transactions that meet the definition of business credit under Regulation B would be considered “covered credit transactions,” including loans, lines of credit, credit cards, and merchant cash advances. 

• Covered entities would be required to collect and report 23 data points to the Bureau. While many of those data points are required by the Dodd-Frank Act, the Bureau has chosen to include several discretionary data points. 

CUNA supports the goals of Section 1071 but raises concerns with the unintended consequences and increased costs that would result from imposing an overly broad and complex small business lending data collection on small community-based lenders.