The House Financial Services Committee (FSC) voted, 26-22, on April 21 to advance legislation to partially nullify a Consumer Financial Protection Bureau (CFBP) rule requiring financial institutions to collect data on certain small business credit applications, among others.
The Small Lenders Exempt from New Data and Excessive Reporting (Small LENDER) Act (H.R. 941), introduced by committee Chair French Hill (R-Ark.), advanced largely along party lines with the goal of protecting smaller lenders from what the bill’s proponents characterize as onerous compliance obligations.
Independent Community Bankers of America (ICBA) President and CEO Rebeca Romero Rainey noted her organization’s support for the legislation, which would exempt most community banks from small-business data collection and reporting requirements under Sec. 1071 of the Dodd-Frank Act.
“ICBA and the nation’s community banks applaud House Financial Services Committee members for voting to advance much-needed legislation exempting the vast majority of community banks from intrusive and overly burdensome data collection and reporting requirements for small-business loans,” she said.
Romero Rainey referred to the Sec. 1071 requirements targeted by the bill as “misguided” and “invasive” to customers, given that they “permit the CFPB to publicly report this sensitive data.”
“We strongly encourage the full House to take up and pass this critical legislation to ensure community banks can continue ensuring locally based economic growth in communities across the nation,” she added.
Sec. 1071 requires lenders to collect and report data on credit applicants, including the race, sex and ethnicity of the principal owners as well as gross annual revenue. H.R. 941 would:
- Exempt community banks under $10 billion in total assets from 1071 reporting.
- Exempt banks that originated fewer than 2,500 small business loans in each of the previous two calendar years.
- Define a “small business” as one with gross annual revenues of $1 million or less in the most recently completed fiscal year.
In 2025, the CFPB proposed a new rule to implement Sec. 1071, which would exempt all banks that made fewer than 1,000 loans to businesses with less than $1 million in gross annual revenue in each of the previous two calendar years. While this exemption threshold would exempt most community banks, ICBA noted that it would support enacting an expanded exemption threshold to create more durable regulatory relief.
The Sec. 1071 rule is one of two rulemakings based on Equal Credit Opportunity Act standards introduced by the bureau last year. The proposed Sec. 1071 rule has received strong support from the financial services sector since its introduction.