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Senators John Boozman, R-Ark., Thom Tillis, R-N.C., Cynthia Lummis, R-Wyo., and Kevin Cramer, R-N.D., Tuesday introduced the S.4004, The Small LENDER Act, which would provide relief to small businesses and lenders from the CFPB’s proposed data collection rule under section 1071 of the Dodd-Frank Act. 

Under the proposed rule, credit unions and credit union service organizations that originated at least 25 covered small business credit transactions in each of the two preceding calendar years would be required to collect and report small business credit application data, including data related to the ethnicity, race, and sex of small business applicants' principal owners.

NAFCU Vice President of Legislative Affairs Brad Thaler shared support for the bill, stating that it would ensure the CFPB’s section 1071 rule “will accurately target true small businesses and not indirectly raise the cost of capital for them.”

Thaler noted that S.4004, The Small LENDER Act, would establish “a 500 covered transaction threshold, codify a small business as one with $1 million or less in revenue, and provide a three-year implementation schedule with an additional grace period , which will ensure that the rulemaking will not go far beyond the intent of the requirements in Dodd-Frank.” 

NAFCU on numerous occasions has shared concerns with Congress and other regulators regarding the CFPB’s proposed rule, urging the Bureau to establish a clear threshold for exempting smaller community leaders under section 1071 and expressing that the rule’s 25 loan threshold is far too low. The association also pointed out that the rule’s broad definition of small businesses would raise the cost of small business borrowing. 

Read NAFCU’s letter of support. NAFCU will continue to monitor movement on the bureau's proposal and will advocate ensuring lawmakers hear the credit union perspective on this issue.