The Dodd-Frank Act requires the CFPB to collect information from financial institutions (not just banks) on credit applications from women- and minority-owned small businesses and other small businesses.  Before proposing these data-collection requirements, the CFPB is seeking information that will inform not only any new reporting requirements, but also broader CFPB and regulatory action risks associated with small-business lending.  Prudential and borrower-protection rules are outside the scope of the CFPB’s consumer-protection jurisdiction, but this provision in law gives it considerable scope to consider the small-business market and perhaps to identify areas where the Bureau believes violations of the Equal Credit Opportunity Act (ECOA) are under its small-business purview and warrant regulatory intervention.  The Bureau’s approach to disparate-impact standards for indirect-auto lending  suggest it could use its power here very broadly, especially if new data backup assertions of discriminatory credit practice.

The full report is available to retainer clients. To find out how you can sign up for the service, click here.