Small Business Concerned with Sec. 1071 Implementation
We’re teaming up with Independent Community Bankers of America to tell the Consumer Financial Protection Bureau (CFPB) that we’re standing with small businesses regarding Sec. 1071 implementation. Learn more and take a stand by writing a personalized letter to the CFPB here:
Overview: Dodd-Frank Section 1071 requires financial institutions to collect and report data on credit applications from certain small businesses—and the CFPB is proposing to exempt only institutions that originate fewer than 25 loans per year. Unfortunately, this is the vast majority of lenders. This proposed implementation will require banks to collect your race and demographic information when you apply for a loan. In addition, banks will be required to report data regarding loan amounts, purpose, loan pricing, number of employees, your census tract, annual revenue, and other data points. Once reported to the CFPB, this data will be anonymized (business names removed) and made public.
They are asking for comments on this rule. If you are concerned about this additional data collection and reporting, please take a moment and let CFPB know they need to fix this proposed regulation.
Please note, the CFPB does not consider form letters, so to help you easily develop and format a truly personalized one, ICBA has created a comprehensive guide (linked at the end). Your letter does not need to be lengthy or address every component of the proposed rule, but it should be unique to your company and your community.
Suggested points for your letter:
- Open with a thank you for the chance to comment and describe your small business.
- Tell the CFPB how disclosing of certain criteria data points puts privacy and sensitive business data at risk.
- Tell the CFPB how they should define a small business (which will determine which businesses are covered by the collection and reporting requirements of the rule). 90 percent of voters believe that a small business is one with revenue of $1 million or less.
- Describe how this implementation would affect your business.
- Illustrate how requiring lenders to guess your race and ethnicity would have a negative impact on you.
Click here to view the Full Comment Letter Guide via Independent Community Bankers of America
