Washington, D.C. – Today, after years of unlawful delay, the Consumer Financial Protection Bureau (CFPB) issued its Section 1071 Final Rule to collect data from financial institutions on lending to women-owned, minority-owned, and small businesses and make the data publicly available to facilitate enforcement of fair lending laws and curb lending discrimination.
When the Trump administration’s CFPB defied Section 1071 of the Dodd-Frank Act of 2010 by failing to collect and disclose this data, a coalition including small business owners from Waterloo, Iowa and Portland, Oregon, the California Reinvestment Coalition (CRC), and the National Association for Latino Community Asset Builders (NALCAB) – represented by Democracy Forward and Hagens Berman Sobol Shapiro LLP – sued to compel the agency to follow the law. In response to that lawsuit, the CFPB signed a settlement agreement in which it committed to meeting court-ordered deadlines for the implementation of Section 1071.
“Today is an important day for women and Black, Indigenous and People of Color small business owners, many of whom have struggled with redlining, lack of access to bank loans and high-cost credit,” said Paulina Gonzalez-Brito, Chief Executive Officer of CRC. “We have desperately needed transparency around small business lending by race, ethnicity and gender of small business borrowers. The new rules will help policymakers ensure equal access to capital for all small businesses and help advocates identify where discrimination and redlining are occurring. The final Section 1071 rule could not have come soon enough for these groups.”
“We need to know much more about small business lending in this country in order to support greater access to capital for small business owners, particularly in communities of color. Section 1071 of the Dodd Frank and Wall Street Reform Act is intended to increase transparency in small business lending, promote economic development and combat discriminatory financial practices. Today’s announcement of a final rule comes after years of NALCAB working to ensure the Consumer Financial Protection Bureau (CFPB) implements this law. By requiring lenders to disclose demographic information about the loans they make to small businesses we can root out discrimination in lending and ensure Latino small businesses have the capital needed to do what they do best, create jobs and spur economic growth,” said Marla Bilonick, President and CEO, NALCAB.
“The Trump administration broke the law when it delayed this critical rulemaking, and we’re glad to see that, after years of unnecessary delay, the Consumer Financial Protection Bureau has issued its Final Rule on Section 1071,” said Jeff Dubner, Deputy Legal Director at Democracy Forward. “While it shouldn’t have taken a lawsuit for the agency to comply with the law, this final rule will allow our clients, small businesses, and organizations across the country to better identify and address discriminatory lending practices by financial institutions.”