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(From InfoSight 360) – The small business lending data collection rule, finalized in March 2023, requires covered financial institutions to collect and report data in connection with applications for credit received from a small business. The rule has been tied up in litigation since its issuance and is currently paused by the 5th Circuit Court of Appeals for members of America’s Credit Unions (ACU) and the American Bankers Association.
In early April, the Consumer Financial Protection Bureau (CFPB) announced its plan to reopen the rule to make changes. While this was welcome news for the industry, until that rulemaking is completed, institutions not covered by the court’s injunction (e.g., those credit unions not affiliated with ACU) remain subject to the mandatory compliance dates outlined below:
- July 18, 2025 – a financial institution that originated at least 2,500 covered credit transactions to small businesses in each year of its determination period
- January 16, 2026 – a financial institution that originated between 500 and 2,499 covered credit transactions to small businesses in each year of its determination period
- October 18, 2026 – a financial institution that originated between 100 and 499 covered credit transactions to small businesses in each year of its determination period
Having one set of financial institutions subject to compliance as early as July 18, 2025, while others are protected by the court’s injunction, created a bifurcated enforcement environment that the CFPB deemed unfair. As a result, on April 30, 2025, the agency issued a press release in which it announced that it will not prioritize enforcement or supervision of the small business lending data collection rule with regard to financial institutions that are not covered by the court’s injunction. The Bureau said that it looks forward to resolving the status of the status of the rule and ensuring fair, consistent treatment for all entities impacted by the regulation.