WASHINGTON—The CFPB is being asked by CUNA to establish an “appropriate” compliance timeline for the Consumer Financial Protection Bureau’s (CFPB) section 1071 rulemaking.
Section 1071 requires financial institutions to compile, maintain, and submit to the CFPB certain data on applications for credit for women-owned, minority-owned, and small businesses.
In its letter, CUNA noted that credit unions support the goals of section 1071 but have concerns with the 1071 rulemaking.
“There is widespread concern that Section 1071’s complexity and significant costs will weigh disproportionately on credit unions in ways that ultimately lead to fewer and less favorable outcomes for all small business borrowers,” the letter reads. “The overly broad scope of the CFPB’s proposed rule will substantially raise the cost of small business borrowing and require covered financial institutions to collect data on businesses that are not ‘small businesses’ by any traditional metric.
Need for ‘Appropriate’ Tailoring
“Section 1071 should be appropriately tailored to ensure the health and financial needs of truly small businesses can continue to be met,” it adds.
CUNA also noted the 18-month mandatory compliance schedule proposed by CFPB would be “aggressive even for the largest, most technologically savvy credit unions.”