On September 15, 2020, the Consumer Financial Protection Bureau (“CFPB” or “Bureau”) released an Outline of Proposals under Consideration and Alternatives Considered for the small business data collection rulemaking mandated by Section 1071 of the Dodd-Frank Act and a High-Level Summary of the outline of proposals.  The release signals that a Small Business Advisory Panel will convene in October 2020 as required by the Small Business Regulatory Enforcement Fairness Act of 1996 (“SBREFA”) to assess the impact of the Bureau’s outline of proposals under consideration.  Participants in the SBREFA panel are invited to submit written comments by November 9, 2020; other interested stakeholders are invited to submit written comments by December 14, 2020.

Section 1071 amends the Equal Credit Opportunity Act to require financial institutions to collect certain data regarding applications for credit for women-owned, minority-owned, and small businesses, maintain records of responses, and report the data to the CFPB on an annual basis, in accordance with rules and guidance issued by the CFPB.  The purpose of Section 1071 is “to facilitate enforcement of fair lending laws and enable communities, governmental entities, and creditors to identify business and community development needs and opportunities of women-owned, minority-owned, and small businesses.”  15 U.S.C. § 1691o-2(a).

The Bureau’s proposals under Section 1071 have been long-awaited by industry associations, consumer groups, state regulators, Congress, and many other stakeholders, and the convening of the SBREFA panel represents the start of a rigorous and potentially lengthy rulemaking process.

A short list of highlights of the proposals follows after the jump, and we plan to publish a more detailed client alert on the CFPB’s outline of proposals in the near future.

Continue Reading CFPB Outlines Small Business Data Collection Proposals

On January 31, 2017, Senators Sherrod Brown (D-OH) and Elizabeth Warren (D-MA) sent a letter to Democratic Senators arguing that the single director structure of the Consumer Financial Protection Bureau (“CFPB”) should not be replaced with a five-member commission.  Specifically, the Senators warned that attempts to restructure the CFPB are intended “to prevent the agency from doing its job” and would “empower Republicans to strangle the agency” by blocking appointees, which could prevent the CFPB from operating.

In defending the single director structure of the CFPB, the Senators gave examples of two multi-member agencies—the National Labor Relations Board and the Export-Import Bank—where Republicans have blocked appointees and effectively hamstrung operation of the agencies.  The Senators did not mention other multi-member agencies, including the Federal Trade Commission (“FTC”), the Federal Deposit Insurance Corporation (“FDIC”), and the Board of Governors of the Federal Reserve System (“Federal Reserve Board”) that have typically operated in a business-as-usual manner notwithstanding periodically unfilled seats. The FTC, FDIC, and the Federal Reserve Board operate under flexible quorum requirements or delegated authority to establish their own quorum requirements.  The Financial CHOICE Act of 2016, which passed the U.S. House of Representatives in the 114th Congress and would have restructured the CFPB as a five-member commission, provided that as few as two members would constitute a quorum for conducting commission business.  A revised version of the Financial CHOICE Act is expected to be introduced in the 115th Congress; the revised bill may leave the single director structure of the CFPB in place.

Continue Reading Democratic Senators Send Letter to Colleagues Arguing Against Restructuring the CFPB as a Commission