Latest Update February 26, 2020

CFPB Makes Progress To Implement Fair Lending Data Collection Following Our Settlement Agreement

The agency has so far met its September 15 deadline to publicly release a proposal for collecting Section 1071 data and its October 15 deadline to convene a Small Business Advocacy Review Panel. CFPB’s November status report confirmed it is on schedule to complete its report on December 14th. We’ll be following to make sure the Trump administration continues to do what the settlement agreement in our lawsuit requires.

The Trump administration defied the Dodd-Frank Act by failing to collect and disclose data on lending to women-owned, minority-owned, and small- businesses. Section 1071 of the Dodd-Frank requires the Consumer Financial Protection Bureau to collect this data from financial institutions and make it publicly available to facilitate enforcement of fair lending laws to curb lending discrimination. Congress further mandated that the CFPB issue rules to implement this data collection.

Yet, in 2018, without any explanation, then-Acting Director Mick Mulvaney unlawfully halted the required rulemaking process and Director Kathy Kraninger took no meaningful steps to remedy this failure. The CFPB has acknowledged that current data is inadequate to fully understand, let alone remedy, the extent to which discriminatory lending creates credit deserts for small businesses and businesses owned by women and minorities.

The lack of data frustrates the ability of small businesses and organizations to detect and address obstacles women-owned, minority-owned, and small- businesses face to obtaining credit. By failing to implement Section 1071 of the Dodd-Frank Act, CFPB has unlawfully withheld and unreasonably delayed agency action, violating the Administrative Procedure Act, so we took CFPB to court on behalf of the California Reinvestment Coalition. If this data were available, CRC and its members would be better able to identify and address gaps in credit access for communities that historically have been disadvantaged in lending.

Since our initial filing, Oregon and Iowa small business owners, alongside the National Association for Latino Community Asset Builders, joined our suit. In our motion for summary judgment, we show how ReShonda Young, Deborah Field, and our nonprofit plaintiffs are each harmed by CFPB’s failure.

On February 26, 2020, we secured a milestone victory by getting court approval of a settlement that requires CFPB to:

  • Outline proposals for collecting the required Section 1071 data and publicly release those proposals for consideration of their effect on small businesses by September 15, 2020.
  • Convene a Small Business Advocacy Review panel to provide input on its proposal by October 15, 2020. CFPB will take panelist suggestions from the small business plaintiff groups.
  • Negotiate deadlines for each stage of the rulemaking process to facilitate the data collection.
  • Submit status reports every 90 days detailing the CFPB’s progress toward implementing this data collection law.

As of its November 23 status report, the CFPB has informed the court that it is on track to complete the panel’s report by December 14, 2020. We’re continuing to monitor updates to ensure the agency carries out its legal obligations from our lawsuit to follow court-ordered deadlines and issue the long-overdue rule to protect small businesses and businesses owned by women and people of color.

May 14, 2019

We filed suit.

June 2019

SMALL BUSINESS OWNERS JOIN COALITION OF PLAINTIFFS IN AN AMENDED COMPLAINT.

Two small business owners from Waterloo, Iowa and Portland, Oregon and the National Association for Latino Community Asset Builders (NALCAB) joined the California Reinvestment Coalition (CRC) in an ongoing lawsuit against the Consumer Financial Protection Bureau (CFPB) for unlawfully delaying implementation of a federal law requiring the CFPB to collect and disclose data from financial institutions on discriminatory lending practices. The plaintiffs, represented by Democracy Forward and Hagens Berman Sobol Shapiro LLP, filed an amended complaint detailing their first-hand experiences with lending discrimination.

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October 2019

IN NEW FILING, SMALL BUSINESS OWNERS DETAIL HARM FROM CFPB’S LACK OF MINORITY LENDING DATA.

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November 2019

WE PUSH BACK AGAINST THE ADMINISTRATION’S ATTEMPT TO DISMISS OUR LAWSUIT.

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February 26, 2020

VICTORY: IN THE FACE OF OUR CHALLENGE, CFPB AGREES TO A SETTLEMENT

the Trump administration has finally agreed to stop flouting its legal obligation to facilitate enforcement of anti-discrimination laws that protect women-owned, minority-owned, and small- businesses from discriminatory financial institutions. Pursuant to a settlement agreement filed with the U.S. District Court for the Northern District of California, the Consumer Financial Protection Bureau will agree to concrete court-ordered deadlines for implementing Section 1071 of the Dodd-Frank Act, which requires the agency to collect and disclose data on discriminatory lending to America’s small businesses. After unlawfully delaying this requirement for years, the CFPB must also submit status reports updating the public on its progress. Today marks a milestone victory for addressing the credit barriers small business owners face across the country — particularly women and entrepreneurs of color.

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Fall 2020

CFPB ABIDES BY THE TERMS OF THE SETTLEMENT

The agency has so far met its September 15 deadline to publicly release a proposal for collecting Section 1071 data and its October 15 deadline to convene a Small Business Advocacy Review Panel. CFPB’s November status report confirmed it is on schedule to complete its report on December 14th. We’ll be following to make sure the Trump administration continues to do what the settlement agreement in our lawsuit requires.

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Jeffrey Dubner

Managing Senior Counsel

Litigating challenges to unlawful, corrupt policymaking and holding agencies accountable.

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