Rule2025-19370
Small Business Lending Under the Equal Credit Opportunity Act (Regulation B); Extension of Compliance Dates
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
October 2, 2025
Effective
December 1, 2025
Issuing agencies
Consumer Financial Protection Bureau
Abstract
The Consumer Financial Protection Bureau (CFPB or Bureau) is finalizing its June 18, 2025 interim final rule amending Regulation B to extend the compliance dates set forth in its 2023 small business lending rule, as amended by a 2024 interim final rule, and to make other date-related conforming adjustments.
Full Text
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<title>Federal Register, Volume 90 Issue 189 (Thursday, October 2, 2025)</title>
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[Federal Register Volume 90, Number 189 (Thursday, October 2, 2025)]
[Rules and Regulations]
[Pages 47514-47523]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-19370]
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CONSUMER FINANCIAL PROTECTION BUREAU
12 CFR Part 1002
[Docket No. CFPB-2025-0017]
RIN 3170-AB40
Small Business Lending Under the Equal Credit Opportunity Act
(Regulation B); Extension of Compliance Dates
AGENCY: Consumer Financial Protection Bureau.
ACTION: Final rule.
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SUMMARY: The Consumer Financial Protection Bureau (CFPB or Bureau) is
finalizing its June 18, 2025 interim final rule amending Regulation B
to extend the compliance dates set forth in its 2023 small business
lending rule, as amended by a 2024 interim final rule, and to make
other date-related conforming adjustments.
DATES: This final rule is effective December 1, 2025.
[[Page 47515]]
FOR FURTHER INFORMATION CONTACT: Dave Gettler, Paralegal Specialist,
Office of Regulations, at 202-435-7700 or <a href="https://reginquiries.consumerfinance.gov/">https://reginquiries.consumerfinance.gov/</a>. If you require this document in an
alternative electronic format, please contact
<a href="/cdn-cgi/l/email-protection#7d3e3b2d3f223c1e1e180e0e141f14111409043d1e1b0d1f531a120b"><span class="__cf_email__" data-cfemail="abe8edfbe9f4eac8c8ced8d8c2c9c2c7c2dfd2ebc8cddbc985ccc4dd">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Background
In 2010, Congress passed the Dodd-Frank Wall Street Reform and
Consumer Protection Act (Dodd-Frank Act). Section 1071 of that Act \1\
amended the Equal Credit Opportunity Act (ECOA) \2\ to require that
financial institutions collect and report to the CFPB certain data
regarding applications for credit for women-owned, minority-owned, and
small businesses. Section 1071's statutory purposes are to (1)
facilitate enforcement of fair lending laws, and (2) enable
communities, governmental entities, and creditors to identify business
and community development needs and opportunities of women-owned,
minority-owned, and small businesses.
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\1\ Public Law 111-203, tit. X, section 1071, 124 Stat. 1376,
2056 (2010), codified at ECOA section 704B, 15 U.S.C. 1691c-2.
\2\ 15 U.S.C. 1691 et seq.
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Section 1071 directs the CFPB to prescribe such rules and issue
such guidance as may be necessary to carry out, enforce, and compile
data pursuant to section 1071. On March 30, 2023, the CFPB issued a
final rule to implement section 1071 by adding subpart B to Regulation
B (2023 final rule). The 2023 final rule was published in the Federal
Register on May 31, 2023.\3\ Further details about rulemaking pursuant
to section 1071 can be found in the preamble to the 2023 final rule. On
June 25, 2024, the CFPB issued an interim final rule (2024 interim
final rule) to extend the rule's compliance dates in accordance with
orders issued by the United States District Court for the Southern
District of Texas.\4\ The 2024 interim final rule was published in the
Federal Register on July 3, 2024.\5\
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\3\ 88 FR 35150 (May 31, 2023).
\4\ Texas Bankers Ass'n v. CFPB, No. 7:23-cv-00144 (S.D. Tex.).
\5\ 89 FR 55024 (July 3, 2024). See also Order Granting-in-Part
and Denying-in-Part Pls.' Mot. for Prelim. Inj., Texas Bankers Ass'n
v. CFPB, No. 7:23-cv-00144 (S.D. Tex. July 31, 2023), ECF No. 25,
<a href="https://files.consumerfinance.gov/f/documents/cfpb_pi_order_texas_bankers.pdf">https://files.consumerfinance.gov/f/documents/cfpb_pi_order_texas_bankers.pdf</a>; Order Granting Intervenors' Mots.
For Prelim. Inj., Texas Bankers Ass'n v. CFPB, No. 7:23-cv-00144
(S.D. Tex. Oct. 26, 2023), ECF No. 69, <a href="https://files.consumerfinance.gov/f/documents/cfpb_pi_second_order_texas_bankers.pdf">https://files.consumerfinance.gov/f/documents/cfpb_pi_second_order_texas_bankers.pdf</a>.
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Challenges to the 2023 final rule filed remain ongoing in three
jurisdictions; each of those courts have stayed the rule's compliance
deadlines for some market participants. Specifically, the United States
Court of Appeals for the Fifth Circuit has stayed the 2023 final rule
and tolled the compliance deadlines for plaintiffs and intervenors in
that case, until further order of the court.\6\ The United States
District Court for the Eastern District of Kentucky has stayed the
deadlines for plaintiffs in that case to comply with the 2023 final
rule until further order of the court.\7\ And the United States
District Court for the Southern District of Florida has stayed the 2023
final rule and tolled the rule's compliance deadlines with respect to
that case's plaintiff and its members for the length of time that the
Fifth Circuit stay order is in effect, subject to modification at any
time by the court.\8\ As the CFPB has noted in that litigation, it
intends to initiate a new Section 1071 rulemaking and anticipates
issuing a notice of proposed rulemaking as expeditiously as reasonably
possible.\9\
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\6\ Unpublished Order, Texas Bankers Ass'n v. CFPB, No. 24-40705
(5th Cir. Feb. 7, 2025).
\7\ Opinion & Order, Monticello Banking Co. et al. v. CFPB et
al., No. 6:23-cv-00148-KKC (E.D. Ky. Mar. 11, 2025).
\8\ Opinion & Order, Revenue Based Finance Coalition v. CFPB et
al., No. 1:23-cv-24882-DSL (S.D. Fla. May 6, 2025).
\9\ See Defendants' Response to Plaintiff's Unopposed Motion to
Stay, ECF No. 75, Revenue Based Finance Coalition v. CFPB et al., No
1:23-cv-24882-DSL (S.D. Fla. Apr. 3, 2025).
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In its second interim final rule published June 18, 2025 (2025
interim final rule), the CFPB extended the compliance dates set forth
in the 2023 final rule, as amended by the 2024 interim final rule, by
approximately one year, and made conforming adjustments.
Although the CFPB determined that the Administrative Procedure
Act's good cause exception for not requiring public comment applied to
the 2025 interim final rule, the CFPB nevertheless solicited comments.
II. Summary of the Final Rule
In this final rule, the CFPB confirms its findings in the 2025
interim final rule and has determined upon a review of comments
received that no further changes are necessary, other than the
correction of two typographical errors in official commentary
identified by commenters.
The CFPB received 20 comments in response to the 2025 interim final
rule. Most commenters addressed the 2025 interim final rule itself;
these comments are summarized and discussed below in part IV. Other
comments addressed provisions of the 2023 final rule not taken up by
the 2025 interim final rule.
The CFPB finalizes the compliance dates in the 2025 interim final
rule, under which covered financial institutions will begin collecting
data as follows:
Table 1--Compliance Dates and Filing Deadlines
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Original Revised compliance
compliance date in date in the 2024 New compliance New first filing
Compliance tier the 2023 final interim final date deadline
rule rule
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Highest volume lenders (Tier 1). October 1, 2024... July 18, 2025..... July 1, 2026...... June 1, 2027.
Moderate volume lenders (Tier 2) April 1, 2025..... January 16, 2026.. January 1, 2027... June 1, 2028.
Smallest volume lenders (Tier 3) January 1, 2026... October 18, 2026.. October 1, 2027... June 1, 2028.
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Further, the CFPB determines it is appropriate to maintain the
other conforming changes to the compliance date provisions promulgated
by the 2025 interim final rule. 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 updated its grace
period policy statement to reflect the revised compliance dates.
[[Page 47516]]
III. Legal Authority
The CFPB adopted the 2023 final rule pursuant to its authority
under section 1071, which directs the CFPB to adopt rules governing the
collection and reporting of small business lending data. Some aspects
of the 2023 final rule were also adopted under the CFPB's more general
rulemaking authorities in ECOA. The CFPB's legal authorities are
discussed in detail in the 2023 final rule.\10\
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\10\ See, e.g., 88 FR 35150, 35173-74 (May 31, 2023).
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The CFPB is finalizing the 2025 interim final rule's extension of
the 2023 final rule's compliance dates, as previously amended by the
2024 interim final rule. ECOA section 704B(g)(1) grants the CFPB
general rulemaking authority for section 1071.
IV. Discussion of the Final Rule
Upon consideration of the comments received, the CFPB is finalizing
the interim final rule. As discussed above, three courts had stayed the
compliance dates set forth in the 2024 interim final rule for the
plaintiffs and intervenors in those cases. However, compliance dates
had not been stayed for those who were not plaintiffs, intervenors, or
their members in those cases. To facilitate consistent compliance
across all covered financial institutions, in the 2025 interim final
rule, the CFPB extended the compliance dates set forth in the 2024
interim final rule by approximately one year. The CFPB now confirms its
belief that this extension of the compliance date should be sufficient
to ensure uniformity of compliance dates with the court-ordered stays
and for the CFPB to issue a new proposal to reconsider certain aspects
of the 2023 final rule. The CFPB is thus making no change to the 2025
interim final rule's adoption of new initial compliance dates of July
1, 2026, January 1, 2027, and October 1, 2027.
A. Changes to Compliance Date Provisions
The 2023 final rule's compliance dates, as amended by the 2024
interim final rule, looked to a financial institution's volume of
covered credit transactions for small businesses in each of calendar
years 2022 and 2023, or 2023 and 2024, to determine the applicable
compliance date. Under the 2024 interim final rule, covered financial
institutions that originated at least 2,500 covered transactions in
both years were required to comply with the requirements of the 2023
final rule beginning July 18, 2025 (sometimes referred to as Tier 1
institutions). Covered financial institutions not in Tier 1 that
originated at least 500 covered transactions in both years had a
compliance date of January 16, 2026 (Tier 2), and covered financial
institutions not in Tier 1 or Tier 2 that originated at least 100
covered transactions in both years had a compliance date of October 18,
2027 (Tier 3).
In the 2025 interim final rule, the CFPB extended each of the
compliance dates set forth in Sec. 1002.114(b) by approximately one
year. Thus, Tier 1 institutions now have a compliance date of July 1,
2026, Tier 2 institutions now have a compliance date of January 1,
2027, and Tier 3 institutions now have a compliance date of October 1,
2027. Likewise, institutions that did not originate at least 100
covered transactions in 2022 and 2023 but subsequently do in two
consecutive calendar years are not required to comply with the rule
until October 1, 2027 at the earliest. The CFPB made corresponding
updates throughout the commentary accompanying Sec. 1002.114(b) and
(c), which provide additional guidance and examples regarding
compliance dates.
Community group commenters opposed the compliance date extension,
stating that an extension is unnecessary, creates confusion, hinders
research and policy advocacy work, and imposes costs on borrowers,
lenders, and policymakers. In addition, they argued that lenders and
vendors have already invested in section 1071 compliance and now face
regulatory limbo. Community group commenters also stated that the
interim final rule will further delay the collection of critical small
business lending data that is integral to improving access to capital
for underserved small businesses across the country.
Industry groups and an independent office of a Federal agency
supported the compliance date extension. Industry groups stated that an
extension directly benefits covered entities, permitting them to ready
their systems and processes without undue pressure. In addition,
industry groups stated that given the various legal challenges to the
section 1071 rule, it is prudent to extend the compliance dates for all
covered lenders and eliminate the different timelines applicable to
those lenders who challenged the rule and those who did not. Moreover,
industry commenters stated that they support the delay to allow the
CFPB the opportunity to reexamine the rule.
One industry group commenter suggested that the initial compliance
dates begin on the first day of a calendar month because a beginning-
of-the-month start date would make the transition to collecting data
less burdensome, from an operational and systems perspective. Other
stakeholders had similarly requested that data collection commence at
the beginning of a calendar quarter.
The independent office of a Federal agency stated that it supports
the delay to provide small financial institutions additional time to
understand, prepare for, and comply with the rule. In addition, an
extension provides more time for outreach, education, and technical
guidance from the CFPB, trade associations, and government partners. A
trade association supported the compliance start date on the first day
of the calendar quarter, asserting this should make the transition to
collecting data smoother and improve data analysis. A State banking
association stated that compliance dates should be set on the first day
of a calendar month. One commenter asserted that partial year data is
not useful for data analysis and thus all data reported in 2027 and
2028 will be useless. The commenter stated that the compliance dates
should be universal for all covered lenders, beginning on January 1,
2028. A coalition of community groups stated that lenders have had
ample time to prepare for compliance and that staggered start dates and
partial year reporting are not necessary. They also requested that
compliance begin for all lenders on the calendar year following
resolution of the lawsuits.
One commenter identified two typographical errors in the official
commentary to Sec. 1002.114 (in comments 114(b)(2)-4.vii and
114(c)(2)-6.vi).
The CFPB agrees with commenters asserting that it would be prudent
to eliminate the different timelines applicable to those lenders who
challenged the rule and those who did not. The CFPB continues to
believe that its decision to delay the rule's compliance dates is
critical to facilitate consistent compliance across all covered
financial institutions. Such a consistent approach will help address
any questions of regulatory limbo and confusion that commenters raised.
Moreover, the revised compliance dates are necessary to give the CFPB
time to consider the feedback it has received from stakeholders since
the publication of the 2023 final rule and time to reconsider certain
of its provisions.
The CFPB has extended the compliance dates by approximately one
year (roughly 350 days), rather than a full year because it agrees with
the comments that these compliance dates would be sensible; first-of-
the-month
[[Page 47517]]
start dates do facilitate the transition to collecting data.
The CFPB has corrected the typographical errors in the official
commentary identified by a commenter in comments 114(b)(2)-4.vii and
114(c)(2)-6.vi.
The CFPB does not agree that extending the compliance dates is
unnecessary or would create confusion, but rather the opposite; the
2025 interim final rule changes eliminate confusion by providing
consistent dates for all financial institutions, whether or not they
are plaintiffs or intervenors in litigation. The CFPB is not persuaded
that these compliance date changes would hinder research and policy
advocacy work; rather, uniform compliance dates would help ensure more
consistent data and better analysis. Further, the CFPB does not agree
that the compliance date changes impose costs on borrowers, lenders,
and policymakers. The compliance dates set forth in the 2025 interim
final rule, as reaffirmed in this final rule, delay the impositions of
identified costs on borrowers and lenders alike. The CFPB is not
persuaded that the compliance date changes impose costs on
policymakers. Policymakers themselves did not comment that the 2025
interim rule would impose costs on them. Finally, while this final rule
reaffirms delays in the collection of small business lending data, the
delays for certain data would have occurred anyway as to some
institutions because of the still outstanding litigation. The CFPB
believes that the resolution of this uncertainty and addressing the
underlying concerns raised by stakeholders about the 2023 final rule
will, in the longer term, result in better data collection.
B. Voluntary Early Collection of Protected Demographic Data
Section 1002.114(c) addresses several transitional issues. Section
1002.114(c)(1) permits a covered financial institution to collect
protected demographic information required under the 2023 final rule
from small business applicants beginning 12 months prior to its
compliance date. As this provision does not list any compliance dates
specifically, no revisions were needed when the 2025 interim final rule
was published.
The CFPB received two comments on this provision. One trade
association stated that the CFPB should not allow voluntary early
compliance with the current rule. The commenter asserted that the rule
is potentially headed towards dramatic changes before future
implementation and permitting voluntary early compliance would open the
door to significant privacy and data security risks for institutions
that collect information the CFPB is not prepared to accept and may
never be prepared to accept under the revised rule. Another trade
association supported permitting voluntary early compliance.
After considering the comments, the CFPB determines that no changes
to this provision are necessary. The CFPB continues to believe, as it
has stated in the 2023 final rule, that voluntary collection is
appropriate to help financial institutions prepare to comply with the
rule and ensure that its systems are working properly. The CFPB
observes that Sec. 1002.114(c)(1) is optional. No financial
institution is obligated to collect data under this provision, and any
institution concerned that doing so would give rise to additional
privacy and data security risks could simply choose not to do so.
Thus, a Tier 1 institution is permitted to begin collecting
protected demographic information on or after July 1, 2025; a Tier 2
institution may begin on or after January 1, 2026; and a Tier 3
institution may begin on or after October 1, 2026, in order to test
their procedures and systems for compiling and maintaining this
information in advance of actually being required to collect and
subsequently report it to the CFPB.\11\
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\11\ Under this provision, financial institutions will have
time--beginning 12 months prior to their compliance date--to adjust
any procedures or systems that may result in the inaccurate
compilation or maintenance of applicants' protected demographic
information, the collection of which is required by section 1071 but
otherwise generally prohibited under ECOA and Regulation B.
(Financial institutions could of course collect the other
information required by the 2023 final rule at any time, without
needing express permission in Regulation B to do so, as is needed
for collecting protected demographic information.) See 88 FR 35150,
35449-50 (May 31, 2023).
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C. Alternative Period for Counting Covered Originations To Determine
Compliance Tier
In the 2025 interim final rule, the CFPB revised Sec.
1002.114(c)(3) (adopted in the 2024 interim final rule), which as
revised permits (but does not require) a financial institution to use
its originations of covered credit transactions in each of calendar
years 2023 and 2024, or 2024 and 2025, rather than those in 2022 and
2023, to determine its compliance date. Financial institutions may use
whichever set of dates they prefer (i.e., 2022 and 2023, or 2023 and
2024, or 2024 and 2025). Existing comment 114(b)-4 provides examples
illustrating how a financial institution uses its originations in 2022
and 2023, or in 2023 and 2024, to determine its compliance tier.
A trade association commenter expressed appreciation for the
clarification that lenders can use 2022 and 2023, 2023 and 2024, or
2024 and 2025 to determine compliance tier.
The CFPB received no additional comments on these portions of Sec.
1002.114(c)(3), or comment 114(b)-4, and determines that no changes to
the provision are necessary.
D. Determining Compliance Dates for Financial Institutions That Do Not
Collect Information Sufficient To Determine Small Business Status
Section 1002.114(c)(2) provides that a financial institution that
is unable to determine the number of covered credit transactions it
originated in 2022 and 2023 for purposes of determining its compliance
tier is permitted to use any reasonable method to estimate its
originations to small businesses for either or both of 2022 and 2023.
Existing comment 114(c)-5 lists several reasonable methods a financial
institution may use to estimate its originations.
Pursuant to revised Sec. 1002.114(c)(3), which permits a financial
institution to use its originations of covered credit transactions in
each of calendar years 2023 and 2024, or 2024 and 2025, to determine
its compliance date, financial institutions are likewise permitted to
use any reasonable method to estimate their originations for either or
both of 2023 and 2024, or 2024 and 2025. Existing comment 114(c)-6
provides examples of ways financial institutions may estimate their
originations.
A trade association commenter expressed support for permitting
lenders to use any reasonable method to estimate origination volume,
stating that many lenders do not track gross annual revenue for small
business customers.
The CFPB received no additional comments on Sec. 1002.114(c)(2) or
(3), or on comments 114(c)-5 or -6, and determines that no changes to
these provisions are necessary.
E. Deadline for Annual Data Submissions
Section 1002.109(a)(1) provides that covered financial institutions
must submit their small business lending application registers to the
CFPB on or before June 1 following the calendar year for which the data
are compiled and maintained. As this provision does not list any
compliance dates specifically, no revisions were needed.
The CFPB received no comments on this provision. Thus, Tier 1
institutions
[[Page 47518]]
will make their first data submission by June 1, 2027; Tier 2 and Tier
3 by June 1, 2028.
V. Effective Date
The CFPB is adopting an effective date of 60 days after publication
of this final rule in the Federal Register.
VI. Grace Period Policy Statement
In the 2025 interim final rule, the CFPB updated its Grace Period
Policy Statement to reflect the new compliance dates to avoid any doubt
as to its intentions regarding a grace period when the rule goes into
effect.\12\
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\12\ This is a general statement of policy under the
Administrative Procedure Act. 5 U.S.C. 553(b). It articulates
considerations relevant to the CFPB's exercise of its authorities.
It does not impose any legal requirements, nor does it confer rights
of any kind. It also does not impose any new or revise any existing
recordkeeping, reporting, or disclosure requirements on covered
entities or members of the public that would be collections of
information requiring approval by the Office of Management and
Budget under the Paperwork Reduction Act. 44 U.S.C. 3501 through
3521.
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The CFPB received two supportive comments on the decision to
maintain the 12-month grace period, adjusted for the new compliance
dates. One individual commenter stated that the grace period fosters a
cooperative regulatory environment, enabling financial institutions to
refine their reporting while allowing CFPB to identify common issues
and best practices. A trade association commented that while it
supports the policy statement, the CFPB should consider a complete
grace period such that banks are not subject to ``matters requiring
attention'' or similar exam findings for the first year of collection.
In addition, the trade association stated that the CFPB should issue a
joint grace period policy statement with the banking agencies, so banks
under $10 billion have the same grace period as larger banks.
The CFPB will take these recommendations under advisement. The CFPB
observes that the Grace Period Policy Statement as written already
states that examinations will be diagnostic and will help to identify
compliance weaknesses, and that the CFPB does not intend to assess
penalties with respect to errors in the initial data submissions.\13\
Further, the CFPB expects to work with other regulators to encourage
them to adopt similar grace period policy statement.
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\13\ 90 FR 25874, 25876 (June 18, 2025).
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The Grace Period Policy Statement described in the 2025 interim
final rule remains in effect, for the reasons set out in that
statement.
VII. CFPA Section 1022(b) Analysis
A. Overview
In developing this final rule, the CFPB has considered the
potential benefits, costs, and impacts as required by section
1022(b)(2) of the Consumer Financial Protection Act of 2010 (CFPA).\14\
Section 1022(b)(2) calls for the CFPB to consider the potential
benefits and costs of a regulation to consumers and covered persons,
including the potential reduction of consumer access to consumer
financial products or services, the impact on depository institutions
and credit unions with $10 billion or less in total assets as described
in section 1026 of the CFPA, and the impact on consumers in rural
areas. In addition, section 1022(b)(2)(B) directs the CFPB to consult
with appropriate prudential regulators or other Federal agencies,
regarding consistency with the objectives those agencies administer.
The CFPB has accordingly consulted with the appropriate prudential
regulators and other Federal agencies regarding consistency with any
prudential, market, or systemic objectives administered by these
agencies.
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\14\ 12 U.S.C. 5512(b)(2).
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This final rule confirms the determinations the CFPB made in the
2025 interim final rule, which are discussed in more detail in part
VII.D below. This final rule does not make any additional substantive
changes to the compliance dates or accompanying provisions.
B. Statement of Need
The CFPB solicited comment on the 2025 interim final rule. This
final rule confirms the determinations the CFPB made in the 2025
interim final rule. This final rule does not make any additional
substantive changes to the compliance dates or accompanying provisions.
C. Baseline for Analysis
In evaluating the potential benefits, costs, and impacts of this
final rule, the CFPB takes as a baseline Regulation B as amended by the
2023 final rule, the 2024 interim final rule, and the 2025 interim
final rule. Part IV above summarizes the relevant provisions of the
2023 final rule, as amended by the 2024 and 2025 interim final rules.
The rule being finalized does not substantively revise Regulation B
beyond the 2023 final rule, as amended by the 2024 and 2025 interim
final rules, and thus does not confer any costs or benefits relative to
the baseline.
D. General Comments on the Impact Analyses in the 2025 Interim Final
Rule
The CFPB received 20 comments on the 2025 impact analysis in the
interim final rule. A few comments were specific to the impact analyses
of the 2025 interim final rule. We discuss these comments below.
Overall, the CFPB did not receive any comments that would lead it to
change its assessment of the costs or benefits of the 2025 interim
final rule.
The CFPB provides an overview here of the impacts of the 2025
interim final rule to provide context for the comments it received. The
CFPB determined that financial institutions would benefit from the 2025
interim final rule because of the delay in the expected costs of
compliance with the 2023 final rule, caused by the extension of the
compliance dates by approximately one year for all covered
institutions. The CFPB expected covered financial institutions to
experience an annual ongoing cost of compliance with the 2023 final
rule. Therefore, extending the compliance dates potentially saves
financial institutions approximately one year's worth of expected
annual compliance costs. The CFPB estimated that the expected cost
savings from the 2025 interim final rule will be about $92 million in
2025, about $190 million in 2026, and about $75 million in 2027, not
accounting for discounting for future years. The present discounted
value of the total cost savings, discounting back to 2024, is about
$313 million using a 3 percent discount rate or about $337 million
using a 7 percent discount rate.\15\ Further amortizing these savings
over three years implies an annualized cost savings of about $119
million using either a 3 percent or a 7 percent discount rate.
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\15\ We calculate these numbers primarily for the purpose of
accounting for savings under Executive Order 14192. To make rules
issued in different years readily comparable, accounting under
Executive Order 14192 uses discounting relative to a common year,
2024.
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The CFPB determined that the 2025 interim final rule will not
change the nominal value of the one-time costs that will be incurred by
covered institutions but does potentially delay the realization of
those costs approximately one year into the future for institutions in
each compliance tier. Thus, the new one-time costs of implementing the
2023 final rule and the 2024 and 2025 interim final rules are the
baseline one-time costs discounted by approximately one year to the
extent they have not already been incurred. The CFPB additionally
expected that the
[[Page 47519]]
compliance date extension by the 2025 interim final rule and the
associated flexibility in years of origination data that can be used to
determine coverage would confer a benefit to covered institutions with
the additional time to prepare for compliance relative to the baseline.
Finally, with the extension of the compliance dates by approximately
one year, the 2025 interim final rule delays the realization of the
potential benefits to covered financial institutions, thus conferring
costs.
In part IX.F of the 2023 final rule, the CFPB described how small
businesses would benefit from the rule through the enforcement of fair
lending laws and on community development. In an environment with
limited data sources on small business credit, the CFPB expected data
collected under the rule to enable communities, governmental entities,
and creditors to identify business and community development needs and
opportunities for women-owned, minority-owned, and small businesses.
The CFPB also expected data collected under the 2023 final rule to
facilitate fair lending enforcement by Federal, State, and local
enforcement agencies. To the extent small businesses benefit in the
above ways from the 2023 final rule, the CFPB determined that the
extension of the compliance dates by the 2025 interim final rule
reduces the benefits accruing to small businesses by delaying the
realization of these benefits, thus conferring costs. The CFPB expected
that the benefits of the 2023 final rule will primarily begin with the
publication of the data. Thus, small businesses' and financial
institutions' realizations of the benefits arising from the 2023 final
rule will likewise be delayed by at least one year by the 2025 interim
final rule, reducing the real net present value of these expected
future benefits. The 2023 final rule also described that the CFPB
expected financial institutions to pass on a portion of their annual
ongoing costs to small business borrowers in the form of higher rates
or fees. While, in general, the CFPB expected the magnitude of any
pass-through to be a small portion of the total cost of the average
loan to a small business applicant, extended compliance dates from the
2025 interim final rule could benefit small business borrowers by
delaying these increased costs.
A coalition of community groups asserted that the 2025 impact
analysis in the interim final rule overestimates the costs of the 2023
final rule, and that, accordingly, the cost savings of the 2025 interim
final rule were overestimated. The CFPB relied on the same cost
estimates from the 2023 final rule to quantify the cost savings of the
2025 interim final rule and continues to believe that they are
appropriate for estimating the impacts of the rule. The group did not
provide additional estimates of the 2025 interim final rule.
The group further asserted that the 2025 interim final rule
dismissed critical benefits of the 2023 final rule, thus
underestimating the costs of delaying implementation. In particular,
the group claims that the 2025 interim final rule does not fully
account for the benefit of market transparency for lenders because of
the 2023 final rule, which would offset compliance costs. The group
also points out that the annualized cost savings of the rule represent
only a fraction of the income of insured depository institutions in
2024. Finally, the group asserted that suggesting that these benefits
are merely qualitative diminishes the costs of discriminatory
treatment. The group did not provide additional substantive information
on the costs of delaying benefits of the 2023 final rule but commented
that these costs would be significant.
The CFPB acknowledges the difficulty of precisely estimating the
benefits of the 2023 final rule, and thus the costs of delaying data
collection associated with the 2025 interim final rule. However,
comments raising concerns about the lack of precise estimates did not
provide sufficient new sources of data or alternative methods that
could be used to quantify the costs of delaying data collection. Given
the available information, the CFPB continues to believe the costs of
delayed benefits of the 2025 interim final rule have been well
considered, even if the CFPB is unable to estimate the magnitude of the
costs.
An independent office of a Federal agency commented on the 2025
interim final rule that the 2023 final rule did not fully consider
costs to small entities, though the commenter relied on those estimates
to describe the cost savings of the 2025 interim final rule. For
example, the commenter asserted that the CFPB did not properly account
for comments from the agency on the 2023 final rule regarding the costs
of staff time, training, and implementing new processes. However, the
commenter did not provide sufficient information upon which to update
these estimates in their comments on the 2023 final rule or the 2025
interim final rule. The CFPB continues to believe that the impacts of
the 2023 final rule were well considered and responsive to comments, as
discussed in the 2023 final rule.
E. Potential Benefits and Costs to Covered Persons and Small Businesses
As discussed in part VII.C, the rule being finalized does not
substantively revise Regulation B beyond the baseline. Further, the
CFPB did not receive comments that would suggest it is necessary to
reconsider the impacts of the 2025 interim final rule. Thus, the CFPB
does not anticipate that this final rule will confer any additional
costs or benefits to covered persons or small businesses beyond those
already accounted for in the 2025 interim final rule.
F. Potential Impacts on Depository Institutions and Credit Unions With
$10 Billion or Less in Total Assets, as Described in CFPA Section 1026
The CFPB does not anticipate that this final rule will confer any
additional costs or benefits to depository institutions and credit
unions with $10 billion or less in total assets beyond those already
accounted for in the 2025 interim final rule.
G. Potential Impacts on Small Businesses' Access to Credit and on Small
Businesses in Rural Areas
The CFPB does not anticipate that this final rule will confer any
additional costs or benefits to depository institutions and credit
unions with $10 billion or less in total assets beyond those already
accounted for in the 2025 interim final rule.
VIII. Regulatory Flexibility Act Analysis
The CFPB's Acting Director certifies that this final rule will not
have any impacts on small entities and so a final regulatory
flexibility analysis is not required.\16\ The rule will not impose any
costs on creditors, including small entities.
---------------------------------------------------------------------------
\16\ 5 U.S.C. 605(b).
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IX. Paperwork Reduction Act
Under the Paperwork Reduction Act of 1995 (PRA), Federal agencies
are generally required to seek approval from the Office of Management
and Budget (OMB) for information collection requirements prior to
implementation. Under the PRA, the CFPB may not conduct or sponsor,
and, notwithstanding any other provision of law, a person is not
required to respond to an information collection unless the information
collection displays a valid control number assigned by OMB. The final
rule amends 12 CFR part 1002 (Regulation B), which implements the small
business lending rule. The CFPB's OMB control number for Regulation B
is
[[Page 47520]]
3170-0013; its current expiration date is August 31, 2026.
The 2025 interim final rule did not add to or change the data
collection requirements of the 2023 final rule; rather, it only changed
the rule's compliance dates and makes other date-related conforming
adjustments. The CFPB therefore determined that this 2025 interim final
rule was ``economically significant.'' This action was considered an
Executive Order 14192 deregulatory action. However, the CFPB does not
anticipate that this final rule will generate any costs or benefits
relative to the baseline of the 2025 interim final rule.
X. Congressional Review Act
Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
the CFPB will submit a report containing this final rule and other
required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States at
least 60 days prior to the rule's published effective date. The Office
of Information and Regulatory Affairs (OIRA) within the Office of
Management and Budget (OMB) has designated this final rule as a ``major
rule'' as defined by 5 U.S.C. 804(2).
XI. Regulatory Review
OIRA has determined that this action is a ``economically
significant regulatory action'' under Executive Order 12866.
Accordingly, OMB has reviewed this action.
List of Subjects in 12 CFR Part 1002
Banks, Banking, Civil rights, Consumer protection, Credit, Credit
unions, Marital status discrimination, National banks, Penalties.
For the reasons set forth in the preamble, the CFPB amends
Regulation B, 12 CFR part 1002, as follows:
PART 1002--EQUAL CREDIT OPPORTUNITY ACT (REGULATION B)
0
1. The authority citation for part 1002 continues to read as follows:
Authority: 12 U.S.C. 5512, 5581; 15 U.S.C. 1691b. Subpart B is
also issued under 15 U.S.C. 1691c-2.
0
2. Revise and republish Sec. 1002.114 to read as follows:
Sec. 1002.114 Effective date, compliance date, and special
transitional rules.
(a) Effective date. The effective date for this subpart is August
29, 2023.
(b) Compliance date. The dates by which covered financial
institutions are initially required to comply with the requirements of
this subpart are as follows:
(1) A covered financial institution that originated at least 2,500
covered credit transactions for small businesses in each of calendar
years 2022 and 2023 shall comply with the requirements of this subpart
beginning July 1, 2026.
(2) A covered financial institution that is not subject to
paragraph (b)(1) of this section and that originated at least 500
covered credit transactions for small businesses in each of calendar
years 2022 and 2023 shall comply with the requirements of this subpart
beginning January 1, 2027.
(3) A covered financial institution that is not subject to
paragraphs (b)(1) or (2) of this section and that originated at least
100 covered credit transactions for small businesses in each of
calendar years 2022 and 2023 shall comply with the requirements of this
subpart beginning October 1, 2027.
(4) A financial institution that did not originate at least 100
covered credit transactions for small businesses in each of calendar
years 2022 and 2023 but subsequently originates at least 100 such
transactions in two consecutive calendar years shall comply with the
requirements of this subpart in accordance with Sec. 1002.105(b), but
in any case no earlier than October 1, 2027.
(c) Special transitional rules--(1) Collection of certain
information prior to a financial institution's compliance date. A
financial institution as described in paragraphs (b)(1), (2), or (3) of
this section is permitted, but not required, to collect information
regarding whether an applicant for a covered credit transaction is a
minority-owned business, a women-owned business, and/or an LGBTQI+-
owned business under Sec. 1002.107(a)(18), and the ethnicity, race,
and sex of the applicant's principal owners under Sec. 1002.107(a)(19)
beginning 12 months prior to its applicable compliance date as set
forth in paragraphs (b)(1), (2), or (3) of this section. A financial
institution collecting such information pursuant to this paragraph
(c)(1) must do so in accordance with the requirements set out in
Sec. Sec. 1002.107(a)(18) and (19), 1002.108, and 1002.111(b) and (c).
(2) Determining which compliance date applies to a financial
institution that does not collect information sufficient to determine
small business status. A financial institution that is unable to
determine the number of covered credit transactions it originated for
small businesses in each of calendar years 2022 and 2023 for purposes
of determining its compliance date pursuant to paragraph (b) of this
section, because for some or all of this period it does not have
readily accessible the information needed to determine whether its
covered credit transactions were originated for small businesses as
defined in Sec. 1002.106(b), is permitted to use any reasonable method
to estimate its originations to small businesses for either or both of
the calendar years 2022 and 2023.
(3) Alternative time period for determining compliance dates. A
financial institution is permitted to use its originations of covered
credit transactions in each of calendar years 2023 and 2024, or 2024
and 2025, in lieu of calendar years 2022 and 2023 as specified in
paragraphs (b) and (c)(2) of this section.
0
3. In Supplement I to part 1002, under ``Section 1002.114--Effective
Date, Compliance Date, and Special Transition Rules'', revise ``114(b)
Compliance Date'' and ``114(c) Special Transition Rules'' to read as
follows:
Supplement I to Part 1002--Official Interpretations
* * * * *
Section 1002.114--Effective Date, Compliance Date, and Special
Transition Rules
114(b) Compliance Date 1. Application of compliance date. The
applicable compliance date in Sec. 1002.114(b) is the date by which
the covered financial institution must begin to compile data as
specified in Sec. 1002.107, comply with the firewall requirements
of Sec. 1002.108, and begin to maintain records as specified in
Sec. 1002.111. In addition, the covered financial institution must
comply with Sec. 1002.110(c) and (d) no later than June 1 of the
year after the applicable compliance date. For instance, if Sec.
1002.114(b)(2) applies to a financial institution, it must comply
with Sec. Sec. 1002.107 and 1002.108, and portions of Sec.
1002.111, beginning January 1, 2027, and it must comply with Sec.
1002.110(c) and (d), and portions of Sec. 1002.111, no later than
June 1, 2028.
2. Initial collections pursuant to Sec. 1002.114(b). i. When
the compliance date of July 1, 2026 specified in Sec.
1002.114(b)(1) applies to a covered financial institution, the
financial institution is required to collect data for covered
applications during the period from July 1, 2026 to December 31,
2026. The financial institution must compile data for this period
pursuant to Sec. 1002.107, comply with the firewall requirements of
Sec. 1002.108, and maintain records as specified in Sec. 1002.111.
In addition, for data collected during this period, the covered
financial institution must comply with Sec. Sec. 1002.109 and
1002.110(c) and (d) by June 1, 2027.
ii. When the compliance date of January 1, 2027 specified in
Sec. 1002.114(b)(2) applies to a covered financial institution, the
financial institution is required to collect data for covered
applications during the period from January 1, 2027 to December 31,
2027. The financial institution must compile data for
[[Page 47521]]
this period pursuant to Sec. 1002.107, comply with the firewall
requirements of Sec. 1002.108, and maintain records as specified in
Sec. 1002.111. In addition, for data collected during this period,
the covered financial institution must comply with Sec. Sec.
1002.109 and 1002.110(c) and (d) by June 1, 2028.
iii. When the compliance date of October 1, 2027 specified in
Sec. 1002.114(b)(3) or (4) applies to a covered financial
institution, the financial institution is required to collect data
for covered applications during the period from October 1, 2027 to
December 31, 2027. The financial institution must compile data for
this period pursuant to Sec. 1002.107, comply with the firewall
requirements of Sec. 1002.108, and maintain records as specified in
Sec. 1002.111. In addition, for data collected during this period,
the covered financial institution must comply with Sec. Sec.
1002.109 and 1002.110(c) and (d) by June 1, 2028.
3. Informal names for compliance date provisions. To facilitate
discussion of the compliance dates specified in Sec.
1002.114(b)(1), (2), and (3), in the official commentary and any
other documents referring to these compliance dates, the Bureau
adopts the following informal simplified names. Tier 1 refers to the
cohort of covered financial institutions that have a compliance date
of July 1, 2026 pursuant to Sec. 1002.114(b)(1). Tier 2 refers to
the cohort of covered financial institutions that have a compliance
date of January 1, 2027 pursuant to Sec. 1002.114(b)(2). Tier 3
refers to the cohort of covered financial institutions that have a
compliance date of October 1, 2027 pursuant to Sec. 1002.114(b)(3).
4. Examples. The following scenarios illustrate how to determine
whether a financial institution is a covered financial institution
and which compliance date specified in Sec. 1002.114(b) applies.
Unless otherwise indicated, in each example the financial
institution has chosen to use its originations in 2022 and 2023
(rather than 2023 and 2024, or 2024 and 2025, as permitted by Sec.
1002.114(c)(3)) to determine its initial compliance tier.
i. Financial Institution A originated 3,000 covered credit
transactions for small businesses in calendar year 2022, and 3,000
in calendar year 2023. Financial Institution A is in Tier 1 and has
a compliance date of July 1, 2026.
ii. Financial Institution B originated 2,000 covered credit
transactions for small businesses in calendar year 2022, and 3,000
in calendar year 2023. Because Financial Institution B did not
originate at least 2,500 covered credit transactions for small
businesses in each of 2022 and 2023, it is not in Tier 1. Because
Financial Institution B did originate at least 500 covered credit
transactions for small businesses in each of 2022 and 2023, it is in
Tier 2 and has a compliance date of January 1, 2027.
iii. Financial Institution C originated 400 covered credit
transactions to small businesses in calendar year 2022, and 1,000 in
calendar year 2023. Because Financial Institution C did not
originate at least 2,500 covered credit transactions for small
businesses in each of 2022 and 2023, it is not in Tier 1, and
because it did not originate at least 500 covered credit
transactions for small businesses in each of 2022 and 2023, it is
not in Tier 2. Because Financial Institution C did originate at
least 100 covered credit transactions for small businesses in each
of 2022 and 2023, it is in Tier 3 and has a compliance date of
October 1, 2027.
iv. Financial Institution D originated 90 covered credit
transactions to small businesses in calendar year 2022, 120 in
calendar year 2023, and 90 in calendar years 2024, 2025, 2026, and
2027. Because Financial Institution D did not originate at least 100
covered credit transactions for small businesses in each of 2022 and
2023, it is not in Tier 1, Tier 2, or Tier 3. Because Financial
Institution D did not originate at least 100 covered credit
transactions for small businesses in subsequent consecutive calendar
years, it is not a covered financial institution under Sec.
1002.105(b) and is not required to comply with the rule in 2026,
2027, or 2028.
v. Financial Institution E originated 120 covered credit
transactions for small businesses in each of calendar years 2022,
2023, 2024, 2025, and 90 in 2026. Because Financial Institution E
did not originate at least 2,500 or 500 covered credit transactions
for small businesses in each of 2022 and 2023, it is not in Tier 1
or Tier 2. Because Financial Institution E originated at least 100
covered credit transactions for small businesses in each of 2022 and
2023, it is in Tier 3 and has a compliance date of October 1, 2027.
However, because Financial Institution E did not originate at least
100 covered credit transactions for small businesses in both 2025
and 2026, it no longer satisfies the definition of a covered
financial institution in Sec. 1002.105(b) at the time of the
compliance date for Tier 3 institutions and thus is not required to
comply with the rule in 2027.
vi. Financial Institution F originated 90 covered credit
transactions for small businesses in calendar year 2022, and 120 in
2023, 2024, 2025, and 2026. Because Financial Institution F did not
originate at least 100 covered credit transactions for small
businesses in each of 2022 and 2023, it is not in Tier 1, Tier 2, or
Tier 3. Because Financial Institution F originated at least 100
covered credit transactions for small businesses in subsequent
calendar years, Sec. 1002.114(b)(4), which cross-references Sec.
1002.105(b), applies to Financial Institution F. Because Financial
Institution F originated at least 100 covered credit transactions
for small businesses in each of 2025 and 2026, it is a covered
financial institution under Sec. 1002.105(b) and is required to
comply with the rule beginning October 1, 2027. Alternatively, if
Financial Institution F chooses to use its originations in calendar
years 2023 and 2024 (or 2024 and 2025) to determine its compliance
tier pursuant to Sec. 1002.114(c)(3), it would be in Tier 3 and
likewise required to comply with the rule beginning October 1, 2027.
vii. Financial Institution G originated 90 covered credit
transactions for small businesses in each of calendar years 2022,
2023, 2024, 2025, 2026, and 2027, and 120 in each of 2028 and 2029.
Because Financial Institution G did not originate at least 100
covered credit transactions for small businesses in each of 2022 and
2023, it is not in Tier 1, Tier 2, or Tier 3. Because Financial
Institution G originated at least 100 covered credit transactions
for small businesses in subsequent calendar years, Sec.
1002.114(b)(4), which cross-references Sec. 1002.105(b), applies to
Financial Institution G. Because Financial Institution G originated
at least 100 covered credit transactions for small businesses in
each of 2028 and 2029, it is a covered financial institution under
Sec. 1002.105(b) and is required to comply with the rule beginning
January 1, 2030.
viii. Financial Institution H originated 550 covered credit
transactions for small businesses in each of calendar years 2022 and
2023, 450 in 2024, and 550 in 2025 and 2026. Because Financial
Institution H originated at least 500 covered credit transactions
for small businesses in each of 2022 and 2023, it would be in Tier 2
and have a compliance date of January 1, 2027. However, Sec.
1002.114(c)(3) permits financial institutions to use their
originations in 2023 and 2024 (or 2024 and 2025), rather than in
2022 and 2023, to determine compliance tier. If Financial
Institution H elects to use its originations in 2023 and 2024, it
would be in Tier 3 and required to comply with the rule beginning
October 1, 2027.
114(c) Special Transition Rules
1. Collection of certain information prior to a financial
institution's compliance date. Notwithstanding Sec.
1002.5(a)(4)(ix), a financial institution that chooses to collect
information on covered applications as permitted by Sec.
1002.114(c)(1) in the 12 months prior to its initial compliance date
as specified in Sec. 1002.114(b)(1), (2) or (3) need comply only
with the requirements set out in Sec. Sec. 1002.107(a)(18) and
(19), 1002.108, and 1002.111(b) and (c) with respect to the
information collected. During this 12-month period, a covered
financial institution need not comply with the provisions of Sec.
1002.107 (other than Sec. Sec. 1002.107(a)(18) and (19)), 1002.109,
1002.110, 1002.111(a), or 1002.114.
2. Transition rule for applications received prior to a
compliance date but final action is taken after a compliance date.
If a covered financial institution receives a covered application
from a small business prior to its initial compliance date specified
in Sec. 1002.114(b), but takes final action on or after that date,
the financial institution is not required to collect data regarding
that application pursuant to Sec. 1002.107 nor to report the
application pursuant to Sec. 1002.109. For example, if a financial
institution is subject to a compliance date of July 1, 2026, and it
receives an application on June 27, 2026 but does not take final
action on the application until July 25, 2026, the financial
institution is not required to collect data pursuant to Sec.
1002.107 nor to report data to the Bureau pursuant to Sec. 1002.109
regarding that application.
3. Has readily accessible the information needed to determine
small business status. A financial institution has readily
accessible the information needed to determine whether its
originations of covered credit transactions were for small
businesses as defined in Sec. 1002.106 if, for instance, it in the
ordinary
[[Page 47522]]
course of business collects data on the precise gross annual revenue
of the businesses for which it originates loans, it obtains
information sufficient to determine whether an applicant for
business credit had gross annual revenues of $5 million or less, or
if it collects and reports similar data to Federal or State
government agencies pursuant to other laws or regulations.
4. Does not have readily accessible the information needed to
determine small business status. A financial institution does not
have readily accessible the information needed to determine whether
its originations of covered credit transactions were for small
businesses as defined in Sec. 1002.106 if it did not in the
ordinary course of business collect either precise or approximate
information on whether the businesses to which it originated covered
credit transactions had gross annual revenue of $5 million or less.
In addition, even if precise or approximate information on gross
annual revenue was initially collected, a financial institution does
not have readily accessible this information if, to retrieve this
information, for example, it must review paper loan files, recall
such information from either archived paper records or scanned
records in digital archives, or obtain such information from third
parties that initially obtained this information but did not
transmit such information to the financial institution.
5. Reasonable method to estimate the number of originations. The
reasonable methods that financial institutions may use to estimate
originations for 2022 and 2023 (or for 2023 and 2024, or 2024 and
2025, pursuant to Sec. 1002.114(c)(3)) include, but are not limited
to, the following:
i. A financial institution may comply with Sec. 1002.114(c)(2)
by determining the small business status of covered credit
transactions by asking every applicant, prior to the closing of
approved transactions, to self-report whether it had gross annual
revenue for its preceding fiscal year of $5 million or less, during
the period October 1 through December 31, 2023. The financial
institution may annualize the number of covered credit transactions
it originates to small businesses from October 1 through December
31, 2023 by quadrupling the originations for this period, and apply
the annualized number of originations to both calendar years 2022
and 2023. Pursuant to Sec. 1002.114(c)(3), a financial institution
is permitted to use its originations in 2023 and 2024 (or 2024 and
2025), rather than 2022 and 2023, to determine its compliance tier.
Thus, for example, a financial institution may ask applicants to
self-report revenue information during the period of October 1
through December 31, 2024, and then may annualize the number of
covered credit transactions it originated to small businesses during
that period and apply the annualized number of originations to both
calendar years 2023 and 2024.
ii. A financial institution may comply with Sec. 1002.114(c)(2)
by assuming that every covered credit transaction it originates for
business customers in calendar years 2022 and 2023 (or in 2023 and
2024, or 2024 and 2025) is to a small business.
iii. A financial institution may comply with Sec.
1002.114(c)(2) by using another methodology provided that such
methodology is reasonable and documented in writing.
6. Examples. The following scenarios illustrate the potential
application of Sec. 1002.114(c)(2) to a financial institution's
compliance date under Sec. 1002.114(b). Unless otherwise indicated,
in each example the financial institution has chosen to estimate its
originations for 2022 and 2023 (rather than 2023 and 2024 or 2024 or
2025 as permitted by Sec. 1002.114(c)(3)) to determine its initial
compliance tier.
i. Prior to October 1, 2023, Financial Institution A did not
collect gross annual revenue or other information that would allow
it to determine the small business status of the businesses for whom
it originated covered credit transactions in calendar years 2022 and
2023. Financial Institution A chose to use the methodology set out
in comment 114(c)-5.i and as of October 1, 2023 began to collect
information on gross annual revenue as defined in Sec.
1002.107(a)(14) for its covered credit transactions originated for
businesses. Using this information, Financial Institution A
determined that it had originated 750 covered credit transactions
for businesses that were small as defined in Sec. 1002.106. On an
annualized basis, Financial Institution A originated 3,000 covered
credit transactions for small businesses (750 originations * 4 =
3,000 originations per year). Applying this annualized figure of
3,000 originations to both calendar years 2022 and 2023, Financial
Institution A is in Tier 1 and has a compliance date of July 1,
2026.
ii. Prior to July 1, 2023, Financial Institution B collected
gross annual revenue information for some applicants for business
credit, but such information was only noted in its paper loan files.
Financial Institution B thus does not have reasonable access to
information that would allow it to determine the small business
status of the businesses for whom it originated covered credit
transactions for calendar years 2022 and 2023. Financial Institution
B chose to use the methodology set out in comment 114(c)-5.i, and as
of October 1, 2023, Financial Institution B began to ask all
businesses for whom it was closing covered credit transactions if
they had gross annual revenues in the preceding fiscal year of $5
million or less. Using this information, Financial Institution B
determined that it had originated 350 covered credit transactions
for businesses that were small as defined in Sec. 1002.106. On an
annualized basis, Financial Institution B originated 1,400 covered
credit transactions for small businesses (350 originations * 4 =
1,400 originations per year). Applying this estimated figure of
1,400 originations to both calendar years 2022 and 2023, Financial
Institution B is in Tier 2 and has a compliance date of January 1,
2027.
iii. Prior to April 1, 2023, Financial Institution C did not
collect gross annual revenue or other information that would allow
it to determine the small business status of the businesses for whom
it originated covered credit transactions in calendar years 2022 and
2023. Financial Institution C chose its own methodology pursuant to
comment 114(c)-5.iii, basing it in part on the methodology specified
in comment 114(c)-5.i. Starting on April 1, 2023, Financial
Institution C began to ask all business applicants for covered
credit transactions if they had gross annual revenue in their
preceding fiscal year of $5 million or less. Using this information,
Financial Institution C determined that it had originated 100
covered credit transactions for businesses that were small as
defined in Sec. 1002.106. On an annualized basis, Financial
Institution C originated approximately 133 covered credit
transactions for small businesses ((100 originations * 365 days)/275
days = 132.73 originations per year). Applying this estimate of 133
originations to both calendar years 2022 and 2023, Financial
Institution C is in Tier 3 and has a compliance date of October 1,
2027.
iv. Financial Institution D did not collect gross annual revenue
or other information that would allow it to determine the small
business status of the businesses for whom it originated covered
credit transactions in calendar years 2022 and 2023. Financial
Institution D determined that it had originated 3,000 total covered
credit transactions for businesses in each of 2022 and 2023.
Applying the methodology specified in comment 114(c)-5.ii, Financial
Institution D assumed that all 3,000 covered credit transactions
originated in each of 2022 and 2023 were to small businesses. On
that basis, Financial Institution D is in Tier 1 and has a
compliance date of July 1, 2026.
v. Financial Institution E did not collect gross annual revenue
or other information that would allow it to determine the small
business status of the businesses for whom it originated covered
credit transactions in calendar years 2022 and 2023. Financial
Institution E determined that it had originated 700 total covered
credit transactions for businesses in each of 2022 and 2023.
Applying the methodology specified in comment 114(c)-5.ii, Financial
Institution E assumed that all such transactions in each of 2022 and
2023 were originated for small businesses. On that basis, Financial
Institution E is in Tier 2 and has a compliance date of January 1,
2027.
vi. Financial Institution F does not have readily accessible
gross annual revenue or other information that would allow it to
determine the small business status of the businesses for whom it
originated covered credit transactions in calendar years 2022 and
2023. Financial Institution F determined that it had originated 80
total covered credit transactions for businesses in 2022 and 150
total covered credit transactions for businesses in 2023. Applying
the methodology set out in comment 114(c)-5.ii, Financial
Institution F assumed that all such transactions originated in 2022
and 2023 were originated for small businesses. On that basis,
Financial Institution F is not in Tier 1, Tier 2 or Tier 3, and is
subject to the compliance date provision specified in Sec.
1002.114(b)(4).
vii. Financial Institution G does not have readily accessible
gross annual revenue or other information that would allow it to
determine the small business status of the
[[Page 47523]]
businesses for whom it originated covered credit transactions in
calendar years 2022, 2023, 2024, or 2025. Financial Institution G
chose to use the methodology set out in comment 114(c)-5.i, and as
of October 1, 2025, Financial Institution G began to ask all
businesses for whom it was closing covered credit transactions if
they had gross annual revenue in the preceding fiscal year of $5
million or less. Using this information, Financial Institution G
determined that it had originated 700 covered credit transactions
during that period for businesses that were small as defined in
Sec. 1002.106. On an annualized basis, Financial Institution G
originated 2,800 covered credit transactions for small businesses
(700 originations * 4 = 2,800 originations per year). Applying this
estimated figure of 2,800 originations to both calendar years 2024
and 2025, Financial Institution G is in Tier 1 and has a compliance
date of July 1, 2026.
* * * * *
Russell Vought,
Acting Director, Consumer Financial Protection Bureau.
[FR Doc. 2025-19370 Filed 10-1-25; 8:45 am]
BILLING CODE 4810-AM-P
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