Small businesses play a vital role in the US economy, but their ability to access credit has been a longstanding obstacle to their viability. A recent Federal Reserve report summarizing survey data found that nearly one-fourth of small businesses that employ others are owned by persons of color.
Congress enacted Section 1071 of the Dodd-Frank Act to solve a basic market failure: the lack of consistent, transparent public data showing which small businesses get credit, on what terms and where gaps remain.
In 2010, in enacting Section 1071 Congress directed financial institutions to submit small business lending data to the Consumer Financial Protection Bureau (CFPB). The goal was to facilitate the enforcement of fair lending laws and help communities, governments and creditors identify credit needs for small businesses, including those owned by women and persons of color. It also required the CFPB to issue rules and guidance to implement Section 1071.
The reporting requirement has never been about reporting for its own sake. The heart of Section 1071 is about knowing who gets access to capital and having a national dataset that can guide enforcement, product design, public investment and advocacy.
On May 1, 2026, the CFPB issued its final revised rule implementing Section 1071 of the Dodd-Frank Act, effectively gutting the 2023 version of the rule’s small business lending reporting requirements by reducing the number of lenders and small businesses covered by the rule. It also reduced the number of data points lenders are required to report. It took 13 years for the CFPB to issue Section 1071’s initial implementing regulation in 2023.
Last year, the Trump administration-led CFPB proposed a drastic overhaul to the 2023 rule’s reporting requirements. The 2026 final rule reflects the proposal by:
- Lowering the number of covered lenders by raising the coverage threshold from 100 to 1,000 originations and excluding Farm Credit System lenders from coverage;
- Reducing the number of covered small businesses by lowering the gross annual revenue cap from $5 million to $1 million;
- Excluding merchant cash advances, agricultural lending and credit transactions of $1,000 or less;
- Reducing the required datapoints by eliminating required reporting on pricing details, number of workers, application method and other categories;
- Modifying the demographic information collected to remove all data collected on disaggregated race, ethnicity and the LGBTQI+ status of business owners applying for credit; and
- Extending the compliance date to January 2028.
These changes drastically reduce the percentage of lenders who must report to the CFPB about their small business lending activities. For example, the percentage of banks required to report is now between 3.6%-3.8% when under the 2023 version of the rule, approximately one third of all banks were required to do so. That is a drop from 1,700-1,860 banks being required to report to only 167-176 banks, meaning that this change will result in a ten-fold reduction in the number of banks required to report. The 2026 rule similarly reduces the number of other lenders required to report as well.
NCRC and its members have been working on small business data transparency for almost two decades. In 2019, Rise Economy, then known as the California Reinvestment Coalition, the National Association of Latino Community Asset Builders (NALCAB) and small business owners sued the CFPB to force the agency to issue the long-delayed rule. That litigation helped produce a court-enforceable deadline for the CFPB to finalize the rule. Now, the fight has shifted from forcing the agency to act to prevent the agency from weakening implementation.
In July 2025, Rise Economy, along with NCRC, Main Street Alliance and Reshonda Young (an Iowa small business owner) sued the CFPB again in federal district court, arguing that the agency unlawfully abandoned its implementation of the congressionally mandated small business lending data rule. The lawsuit alleges Administrative Procedure Act violations and seeks to halt the administration’s actions by requiring enforcement of the lending transparency rule.
The suit argues that when Congress tells an agency to collect and publish data to detect discrimination and identify community development needs, the agency should not be able to nullify that Congressional mandate through delay, non-enforcement or by creating a rule so useless that it undermines the statute’s purpose.
Financial institutions often argue that reporting will be costly, could discourage small business lending and that demographic data collection creates privacy or reputational risks. However, those concerns are not arguments for keeping the public in the dark. Since 1975, the Home Mortgage Disclosure Act (HMDA) has required financial institutions to maintain, report and publicly disclose loan-level information about mortgages to help show whether lenders are serving the housing needs of communities.
The long history of mortgage lenders complying with HMDA reporting requirements demonstrates that public loan-level data can coexist with a robust credit market. Section 1071 also addresses privacy concerns by containing privacy protections that allow the CFPB to modify or withhold data when disclosure risks are too high. The better policy response would be to gradually phase in the new compliance requirements, provide clearer guidance and better protect sensitive information, much of which was contained in the 2023 CFPB rule.
Opponents of Section 1071 have been pursuing congressional carveouts and repeals. For example, if enacted, H.R. 976 would repeal the small business lending data collection requirements outright, while other bills would narrow who must report and what they must report on. The Small LENDER Act (H.R. 941) would sharply exempt all lenders making fewer than 2,500 small business loans, limit covered small businesses to those with $1 million or less in annual revenue and delete key datapoints from reporting requirements, such as pricing and denial reasons.
Another example is the House-passed Farm Bill in April 2026 with language making the Farm Credit Administration the “sole and independent regulator.” The accompanying committee report also makes clear that the provision is intended to shield Farm Credit institutions from CFPB 1071 reporting requirements. If passed into law, the exemption would make it harder for the public to know if capital is reaching agricultural businesses that are small, just starting out or underserved.
After 16 years of advocacy, research, rulemaking and litigation, the progress behind Section 1071 is real, even if the work is unfinished. Advocates helped move small business lending data transparency from a statutory promise in 2010 to a national rule. Still, the CFPB’s 2026 rule has gutted the dataset needed for the public to identify discrimination, credit deserts and unmet capital demand.
Advocates can help keep the debate grounded by documenting local small business credit barriers, educating lawmakers about how additional 1071 data would improve community development work and urging lawmakers to oppose changes to the statute that would further prevent the public from seeing which lenders are serving small businesses fairly and which communities are still being left out.
Tara Flynn is the Policy Director with NCRC’s Policy & Government Affairs team.
Photo credit: Steph Quernemoen via Unsplash.
