We recently blogged about an American Banker article written by officials of three community groups that urged President Obama to publicly denounce Director Cordray for failing to issue regulations implementing the small business lending data requirements of Dodd-Frank Section 1071. Section 1071 amended the ECOA to require financial institutions to collect and maintain certain data in connection with credit applications made by women- or minority-owned businesses and small businesses. Such data includes the race, sex, and ethnicity of the principal owners of the business.
Last week, a group of 19 Democratic U.S. Senators sent a letter to Director Cordray in which they urged the CFPB “to expedite its rulemaking around publicly available small business loan data.” The Senators want the CFPB “to move forward this year with its rulemaking without further delay.”
The Senators’ letter suggests that the CFPB is facing mounting pressure to issue Section 1071 regulations. As we previously commented, given the CFPB’s numerous other pending regulatory initiatives, we hope the CFPB will resist such pressure and not move forward hastily on Section 1071 regulations. Doing so will result in further burdens on the consumer financial services industry, which is already struggling to cope with the existing regulatory avalanche.