JD Supra, October 18, 2021, CFPB’s Small Business Lending Data Collection Rulemaking
Last month, the Consumer Financial Protection Bureau (CFPB) issued a long-anticipated proposed rule (published in the Federal Register on October 8, 2021) requiring regulated financial institutions to collect and report small business lending data to the Bureau.
The COVID-19 pandemic and disaster relief programs in response highlighted the fair lending risks in the small business lending market. In introducing the proposed rulemaking, the CFPB’s Acting Director said:
[The Paycheck Protection Program] was plagued with problems—the smallest businesses had trouble accessing the funds, and, at least initially, reports were widespread that Black and Hispanic entrepreneurs had trouble accessing funds as well. For example, testing conducted by the National Community Reinvestment Coalition showed that Black women entrepreneurs, in particular, were seldom, if ever, encouraged by lenders to apply for PPP loans, even though they were as well-qualified as others who were encouraged to apply.
