Today, the Consumer Financial Protection Bureau (CFPB) filed a settlement agreement with the U.S. District Court for the Northern District of California that outlines court-ordered deadlines for implementation of Section 1071 of the Dodd-Frank Act. Section 1071 requires financial institutions to compile, maintain and submit to the CFPB certain data on credit applications by women- and minority-owned small businesses.
The CFPB’s agreement was in response to a lawsuit filed by Democracy Forward and Hagens Berman Sobol Shapiro LLP on behalf of NCRC member organization California Reinvestment Coalition, the National Association for Latino Community Asset Builders (NALCAB) and small business owners in Waterloo, Iowa, and Portland, Oregon.
Jesse Van Tol, CEO of NCRC, made the following statement:
“The implementation of Section 1071 is long overdue. NCRC’s research and evaluation of small business lending has shown time and again that discrimination is still part of the experience for many women- and minority-owned businesses. Despite these findings, it has also been clear to us that much of this discrimination goes unnoticed by banks and their federal regulators, and there is inadequate data collection for the public to hold them to account. The need for this data was recognized in 2010 when Dodd-Frank was enacted, and it is a case study in bureaucratic disfunction and obstruction that it has taken this long to implement Section 1071 – and finally, after all these years, only with a court order. This data, once it’s finally available to the public, will provide valuable insight for understanding this opaque market and enable regulators and stakeholders to hold banks accountable for their small business lending practices.”
I also want to commend the efforts of the plaintiffs in pursuing this case and winning this agreement with CFPB.”