On May 10, 2017, the Consumer Financial Protection Bureau (“CFPB”) issued a request for information on small business lending. In a press release accompanying the request, the CFPB stated that its goal is to “learn more about how small businesses engage with financial institutions, with a particular focus on women-owned and minority-owned small business,” in order to help “implement [its] data collection rule.” The small business data collection rule, mandated by Section 1071 of the Dodd-Frank Act but not yet proposed by the CFPB, will impose reporting requirements on financial institutions for information concerning “credit applications made by women-owned, minority-owned, and small businesses.” The CFPB has previously clarified that “financial institutions’ obligations under [S]ection 1701 do not go into effect until the Bureau issues necessary implementing regulations.”

The request for information does not come as a surprise, given the CFPB’s indication in its Fifth Annual Fair Lending Report (which we discussed last month) that it will increase its focus on small business lending. In a speech at the Small Business Lending Field Hearing held on May 10, CFPB Director Richard Cordray emphasized that “business opportunity — especially opportunities for small businesses — often hinges on the availability of financing.”

In the request for information, the CFPB acknowledged that it is in the “early stages” of implementing a small business data collection rule that is designed to “fill existing gaps in the general understanding of the small business lending environment” and identify “potential fair lending concerns regarding small businesses.” The CFPB further stated its belief that the rule should cover “an extensive share of the market and contain enough flexibility to analyze different market segments.” At the same time, the CFPB expressed interest in “exploring potential ways to implement [the rule] in a balanced manner” that would minimize burden to both industry and the CFPB.…

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