June 28, 2024
On June 25, 2024, the Consumer Financial Protection Bureau extended compliance dates for its Small Business Lending Rule promulgated pursuant to Section 1071 of the Dodd-Frank Act. The rule requires covered financial institutions to collect data on certain credit applications from small businesses and report that data to the CFPB. The extension follows the U.S. Supreme Court's decision in Consumer Financial Protection Bureau v. Community Financial Services Association of America, Ltd. (the "CFSA case"), holding that the CFPB's funding structure is constitutional. After the CFPB issued the rule in March 2023, a Texas court (in an action called Texas Bankers Association v. Consumer Financial Protection Bureau) stayed the rule pending the outcome of the CFSA case. In Texas Bankers, the court ruled that if the Supreme Court overturned the Fifth Circuit's CFSA case decision (which it did), then the CFPB must extend the compliance deadlines by the same number of days as the duration of the stay, which began on July 31, 2023. Because the stay lasted for 290 days, the CFPB has extended the compliance deadlines by 290 days.
Compliance deadlines are tiered, based on volume of loan origination. Lenders with the highest volume of small business loans will now be required to begin collecting data by July 18, 2025, moderate volume lenders by January 16, 2026, and smallest volume lenders by October 18, 2026. The deadline for reporting small business lending data to the CFPB is June 1 following the calendar year for which data are collected.