CUNA wrote in support of legislation Tuesday that would reform Section 1071 of the Dodd-Frank Act. Section 1071 of the Dodd-Frank Act requires financial institutions collect and report certain data regarding applications for credit for women-owned, minority-owned, and small businesses to the Consumer Financial Protection Bureau (CFPB).
CUNA supports the goals of Section 1071 but is concerned about unintended consequences of broad data collection.
“There is widespread concern that Section 1071’s complexity and significant costs will weigh disproportionately on credit unions in ways that ultimately lead to fewer and less favorable outcomes for all small business borrowers,” the letter reads. “The overly broad scope of the CFPB’s proposed rule will substantially raise the cost of small business borrowing and require covered financial institutions to collect data on businesses that are not “small businesses” by any traditional metric. Section 1071 should be appropriately tailored to ensure the health and financial needs of truly small businesses can continue to be met.”
CUNA also supports efforts to establish an appropriate compliance timeline for Section 1071 instead of the mandatory 18-month compliance scheduled proposed by the CFPB.
The bills are: