November 21, 2025

Vol. XLII, No. 13

Small Business Lending - Section 1071 (ECOA - Reg B)

In light of court orders in ongoing litigation, the Consumer Financial Protection Bureau (CFPB) has amended Regulation B to extend the compliance date set forth in its 2023 Small Business Lending Rule, as amended by a 2024 interim final rule.

The Equal Credit Opportunity Act (ECOA) requires financial institutions to collect and report to the CFPB certain data regarding applications for credit for women-owned, minority-owned, and small businesses. The CFPB is directed to prescribe such rules and issue such guidance as may be necessary to carry out, enforce and compile data pursuant to Section 1071 of the ECOA.

The compliance dates for covered financial institutions to begin collecting data have been extended for approximately one year by the CFPB, as follows:

Covered financial institutions are permitted to continue using their small business originations from 2022 and 2023 to determine their compliance tier, or they may instead use their originations from 2023 and 2024, or from 2024 and 2025. Covered financial institutions are permitted to begin collecting protected demographic data required under the 2023 final rule 12 months before their new compliance date, in order to test their procedures and systems. As illustrated above, the deadline for submitting small business lending data will remain June 1 following the calendar year for which data are collected. Finally, the CFPB is updating its grace period policy statement to reflect the revised compliance dates.

The CFPB has recently proposed revisions to the provisions of Regulation B implementing Section 1071 of the ECOA. The proposed revisions would eliminate the system of tiered compliance dates in favor of a single compliance date; change the rule's origination threshold; and alter the special transition rule pertaining to the manner in which a financial institution is to count its originations to determine whether it must comply with the rule. Stay tuned for final action on the proposed revisions.

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The foregoing Compliance Update is for informational purposes only and does not constitute legal advice. As a reminder, the NBA general counsel is the attorney for the Nebraska Bankers Association, not its member banks. The general counsel is available to assist members with finding resources to help answer their questions. However, for specific legal advice about specific situations, members must consult and retain their own attorney.