Proposed Rule2025-19865
Small Business Lending Under the Equal Credit Opportunity Act (Regulation B)
Primary source
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Published
November 13, 2025
Issuing agencies
Consumer Financial Protection Bureau
Abstract
The Consumer Financial Protection Bureau (CFPB or Bureau) proposes revisions to certain provisions of Regulation B, subpart B, implementing changes to the Equal Credit Opportunity Act made by section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Bureau is reconsidering coverage of certain credit transactions and financial institutions; the small business definition; inclusion of certain data points and how others are collected; and the compliance date. The CFPB believes these proposed changes would streamline the rule, reduce complexity for lenders, and improve data quality, advancing the purposes of section 1071 and complying with recent executive directives.
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[Federal Register Volume 90, Number 217 (Thursday, November 13, 2025)]
[Proposed Rules]
[Pages 50952-51011]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-19865]
[[Page 50951]]
Vol. 90
Thursday,
No. 217
November 13, 2025
Part II
Consumer Financial Protection Bureau
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12 CFR Part 1002
Small Business Lending Under the Equal Credit Opportunity Act
(Regulation B); Proposed Rule
Federal Register / Vol. 90 , No. 217 / Thursday, November 13, 2025 /
Proposed Rules
[[Page 50952]]
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CONSUMER FINANCIAL PROTECTION BUREAU
12 CFR Part 1002
[Docket No. CFPB-2025-0040]
RIN 3170-AB40
Small Business Lending Under the Equal Credit Opportunity Act
(Regulation B)
AGENCY: Consumer Financial Protection Bureau.
ACTION: Proposed rule; request for public comment.
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SUMMARY: The Consumer Financial Protection Bureau (CFPB or Bureau)
proposes revisions to certain provisions of Regulation B, subpart B,
implementing changes to the Equal Credit Opportunity Act made by
section 1071 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act. The Bureau is reconsidering coverage of certain credit
transactions and financial institutions; the small business definition;
inclusion of certain data points and how others are collected; and the
compliance date. The CFPB believes these proposed changes would
streamline the rule, reduce complexity for lenders, and improve data
quality, advancing the purposes of section 1071 and complying with
recent executive directives.
DATES: Comments must be received on or before December 15, 2025.
ADDRESSES: You may submit comments, identified by Docket No. CFPB-2025-
0040 or RIN 3170-AB40, by any of the following methods:
<bullet> Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
Follow the instructions for submitting comments. A brief summary of
this document will be available at <a href="https://www.regulations.gov/docket/CFPB-2025-0040">https://www.regulations.gov/docket/CFPB-2025-0040</a>.
<bullet> Email: <a href="/cdn-cgi/l/email-protection#03313331362e4d53514e2e323334325166606c6d706a67667162776a6c6d43606573612d646c75"><span class="__cf_email__" data-cfemail="2f1d1f1d1a02617f7d62021e1f181e7d4a4c40415c464b4a5d4e5b4640416f4c495f4d01484059">[email protected]</span></a>. Include
Docket No. CFPB-2025-0040 or RIN 3170-AB40 in the subject line of the
message.
<bullet> Mail/Hand Delivery/Courier: Comment Intake--1071
Reconsideration NPRM, c/o Legal Division Docket Manager, Consumer
Financial Protection Bureau, 1700 G Street NW, Washington, DC 20552.
Instructions: The CFPB encourages the early submission of comments.
All submissions should include the agency name and docket number or
Regulatory Information Number (RIN) for this rulemaking. Because paper
mail is subject to delay, commenters are encouraged to submit comments
electronically. In general, all comments received will be posted
without change to <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
All submissions, including attachments and other supporting
materials, will become part of the public record and subject to public
disclosure. Proprietary information or sensitive personal information,
such as account numbers or Social Security numbers, or names of other
individuals, should not be included. Submissions will not be edited to
remove any identifying or contact information.
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#0c4f4a5c4e534d6f6f697f7f656e65606578754c6f6a7c6e226b637a"><span class="__cf_email__" data-cfemail="83c0c5d3c1dcc2e0e0e6f0f0eae1eaefeaf7fac3e0e5f3e1ade4ecf5">[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. 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.
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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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The CFPB worked toward a section 1071 rulemaking for a number of
years and has sought public comment from stakeholders numerous times.
The CFPB held a field hearing on May 10, 2017, and published a request
for information regarding the small business lending market.\3\ On July
22, 2020, the CFPB issued a survey to collect information about
potential one-time costs to financial institutions to prepare to
collect and report data on small business lending.
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\3\ The CFPB received 17 comments in response to the request for
information. See CFPB, Requests for Information: Small Business
Lending Market, Docket ID CFPB 2017-0011, <a href="https://www.regulations.gov/document/CFPB-2017-0011-0001/comment">https://www.regulations.gov/document/CFPB-2017-0011-0001/comment</a>.
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On September 15, 2020, the CFPB released an Outline of Proposals
Under Consideration and Alternatives Considered pursuant to the Small
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA). On
October 15, 2020, the CFPB convened a Small Business Review Panel for
the section 1071 rulemaking, and the Panel met with small entity
representatives (SERs). The Panel Report, publicly released on December
15, 2020, was the culmination of the SBREFA process for the section
1071 rulemaking and included feedback from SERs and written feedback
from other stakeholders as well.
On October 8, 2021, the CFPB published in the Federal Register a
proposed rule (2021 proposed rule) amending Regulation B to implement
changes to ECOA made by section 1071 of the Dodd-Frank Act.\4\ The
comment period for the proposed rule closed on January 6, 2022.
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\4\ 86 FR 56356 (Oct. 8, 2021).
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The CFPB received approximately 2,100 comments on the proposal
during the comment period. Approximately 650 of these comments were
unique, detailed comment letters representing diverse interests. These
commenters included lenders such as banks and credit unions, community
development financial institutions (CDFIs), community development
companies, Farm Credit System (FCS) lenders, online lenders, and
others; national and regional industry trade associations; software
vendors; business advocacy groups; community groups; research,
academic, and other advocacy organizations; Members of Congress;
Federal and State government offices/agencies; small businesses; and
individuals.
On May 31, 2023, the CFPB published a final rule in the Federal
Register to implement section 1071 by adding subpart B to Regulation B
(2023 final rule).\5\ Further details about section 1071, small
business lending market dynamics, and the CFPB's rulemaking process
leading up to the 2023 final rule can be found in the preamble to the
2023 final rule.
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\5\ 88 FR 35150 (May 31, 2023).
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On July 3, 2024, the CFPB published in the Federal Register an
interim final rule (2024 interim final rule)\6\ to extend
[[Page 50953]]
the rule's compliance dates in accordance with orders issued by the
United States District Court for the Southern District of Texas.\7\
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\6\ 89 FR 55024 (July 3, 2024). See also Order Granting-in-Part
& 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), <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), <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>; Op. & Order,
Monticello Banking Co. et al. v. CFPB et al., No. 6:23-CV-00148-KKC
(E.D. Ky. Mar. 11, 2025); Op. & Order, Revenue Based Finance
Coalition v. CFPB et al., No. 1:23-CV-24882-DSL (S.D. Fla. May 6,
2025).
\7\ Texas Bankers Ass'n v. CFPB, No. 7:23-CV-00144 (S.D. Tex.
July 31, 2023) <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>.
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Challenges to the 2023 final rule filed by various plaintiffs
remain ongoing in three jurisdictions; each of those courts stayed the
rule's compliance deadlines for some market participants.\8\ However,
the courts did not stay the compliance dates for those who are not
plaintiffs or intervenors in those cases.
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\8\ See Unpublished Order, Texas Bankers Ass'n v. CFPB, No. 24-
40705 (5th Cir. Feb. 7, 2025) (tolling the compliance deadlines for
plaintiffs and intervenors in that case, until further order of the
court); Op. & Order, Monticello Banking Co. et al. v. CFPB et al.,
No. 6:23-CV-00148-KKC (E.D. Ky. Mar. 11, 2025) (same).
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On June 18, 2025, the CFPB published in the Federal Register an
interim final rule (2025 interim final rule) to extend compliance
deadlines by approximately one year\9\ to facilitate consistent
compliance across all covered financial institutions. The CFPB sought
comment on the 2025 interim final rule.
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\9\ 90 FR 25874 (June 18, 2025).
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On October 2, 2025, the CFPB published in the Federal Register a
final rule (2025 compliance date final rule) that confirmed its
findings in the 2025 interim final rule and determined upon a review of
comments received that no further substantive changes were
necessary.\10\ The CFPB received 20 comments in response to the 2025
interim final rule. Most commenters addressed the 2025 interim final
rule itself. Other comments addressed provisions of the 2023 final rule
not addressed by the 2025 interim final rule, some of which are
discussed below.
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\10\ 90 FR 47514 (Oct. 2, 2025).
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Based on reactions to the 2023 final rule, including continued
feedback from stakeholders and the ongoing litigation, the CFPB now
believes that at the onset of a potentially long-term data collection
regime, it should start with more modest requirements, focusing on core
lending products, lenders, and data. The CFPB preliminarily believes
that that reaction to the 2023 final rule, practically speaking, was in
part based on its expansive approach, appearing to seek broad coverage
of lenders, products, and information collected.\11\ The CFPB does not
believe that alignment with the statutory purposes of section 1071
requires the use of its discretionary authority to collect data with
such a breadth of scope.
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\11\ The CFPB had considered, in its SBREFA Outline of Proposals
Under Consideration, a rule that was more limited in scope. See
generally CFPB, Final Report of the Small Business Review Panel on
the CFPB's Proposals Under Consideration for the Small Business
Lending Data Collection Rulemaking (Dec. 14, 2020), <a href="https://www.consumerfinance.gov/documents/9413/cfpb_1071-sbrefa-report.pdf">https://www.consumerfinance.gov/documents/9413/cfpb_1071-sbrefa-report.pdf</a>.
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The CFPB now believes that the 2023 final rule should have given
more weight to qualitative differences among certain types of lenders
and the likelihood that smaller lenders would face difficulties
addressing the complexity of a rule of broad scope, both of which could
potentially diminish the quality of the data they collect.
The CFPB believes, based on this experience, that a longer-term
approach to advance the statutory purposes of section 1071 would be to
commence the collection of data with a narrower scope to ensure its
quality and to limit, as much as possible, any disturbance of the
provision of credit to small businesses. The statutory purposes of the
rule are not well served by an expansive rule that could create
disruptions in small business lending markets.
Rather, the CFPB now believes that an incremental approach may
better serve the statutory purposes of section 1071 in the long term.
Such an approach would start with core lending products, core
providers, and core data points. This approach would comply with
section 1071 and further its statutory purposes but reduce the rule's
initial impact on small businesses and lenders. Over time, as the CFPB
and financial institutions learn from early iterations of data
collections, the CFPB could consider amending the rule.
The gradual development of data collection under the Home Mortgage
Disclosure Act (HMDA) \12\ and its implementing Regulation C \13\ over
the past 50 years provides precedent for an incremental approach.
Congress passed HMDA in 1975,\14\ and the Board Governors of the
Federal Reserve System (Board) promulgated implementing regulations in
1976, requiring the collection of relatively few data points from
relatively few lenders. At various points, HMDA amendments passed by
Congress, among other things, expanded the breadth of financial
institutions covered, as well as the number of data points collected
from those reporting institutions.\15\ Over time, rulemakings by the
Board and the CFPB implemented these amendments, added and removed data
points, and expanded and contracted the scope of Regulation C.\16\
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\12\ 12 U.S.C. 2801 et seq.
\13\ 12 CFR part 1003.
\14\ Home Mortgage Disclosure Act of 1975, Public Law 94-200,
section 303(2), 89 Stat. 1124, 1125 (1975).
\15\ Congress amended HMDA in 1980, 1988, 1989, 1992, 1996,
2010, and 2018. See, e.g., Housing and Community Development Act of
1980, Public Law 96-399, section 340(c), 94 Stat. 1614 (1980)
(codified as amended at 12 U.S.C. 2809(a)); Housing and Community
Development Act of 1987, Public Law 100-242, section 565(a)(l), 101
Stat. 1815 (1988) (codified as amended at 12 U.S.C. 2802); Financial
Institution Reform, Recovery, and Enforcement Act, Public Law 101-
73, section 1211(d)-(e), 103 Stat. 183 (1989) (codified as amended
at 12 U.S.C. 2802(2)); Housing and Community Development Act of
1992, H. 5334, Public Law No 102-550, section 932(a)-(b) (1992)
(codified as amended at 12 U.S.C. 2803 (a)-(b)); Omnibus
Consolidated Appropriations Act, 1997, HR 3610, Public Law 104-208,
section 2225, 110 Stat 3009 (1996) (codified as amended at 12 U.S.C.
2808(b)(2)); Dodd-Frank Wall Street Reform and Consumer Protection
Act, Public Law 111-203, section 1094, 124 Stat. 1376 (2010);
Economic Growth, Regulatory Relief, and Consumer Protection Act,
Public Law 115-174, section 104, 132 Stat. 1296 (2018).
\16\ See, e.g., 46 FR 40679 (Aug. 11, 1981); 53 FR 31683 (Aug.
19, 1988); 54 FR 51356 (Dec. 15, 1989); 57 FR 56963 (Dec. 2, 1992);
60 FR 22223 (May 4, 1995); 67 FR 7222 (Feb. 15, 2002); 67 FR 43217
(June 27, 2002); 80 FR 66128 (Oct. 28, 2015); 84 FR 57946 (Oct. 29,
2019); 85 FR 28364, 28367 (May 12, 2020).
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The CFPB believes that it should approach the section 1071 data
collection regime as a longer-term project akin to HMDA. The CFPB
believes that it is a proper use of its authority under 15 U.S.C.
1691c-2 to reconsider several portions of the 2023 final rule to
commence data collection with a focus on core lending products, core
lenders, and mostly statutory data points. The CFPB believes that this
incrementalist approach--starting with a more modest rule with a
limited set of products, lenders, or data points--will serve the long-
term interests of section 1071.
In addition, on January 20, 2025, the President issued Executive
Order (E.O.) 14168, ``Defending Women From Gender Ideology Extremism
and Restoring Biological Truth to the Federal Government'' (Defending
Women E.O.).\17\ That order, among other things, directs Federal
agencies to remove references and questions discussing gender identity.
The order also identifies a binary of male/female sex, directing
agencies to use those terms when seeking information about an
individual's sex.
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\17\ 90 FR 8615 (Jan. 30, 2025).
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The CFPB has consulted with the appropriate prudential regulators
and other Federal agencies regarding consistency with any prudential,
market, or systemic objectives administered by these agencies as
[[Page 50954]]
required by section 1022(b)(2)(B) of the Dodd-Frank Act.
II. Legal Authority
The Bureau is issuing this proposed rule pursuant to its authority
under section 1071. As discussed above, in the Dodd-Frank Act, Congress
amended ECOA by adding section 1071, which directs the CFPB to adopt
regulations governing the collection and reporting of small business
lending data. Specifically, section 1071 requires financial
institutions to collect and report to the CFPB certain data on
applications for credit for women-owned, minority-owned, and small
businesses. Congress enacted section 1071 for the purpose of (1)
facilitating enforcement of fair lending laws and (2) enabling
communities, governmental entities, and creditors to identify business
and community development needs and opportunities of women-owned,
minority-owned, and small businesses.\18\
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\18\ 15 U.S.C. 1691c-2(a).
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To advance these statutory purposes, section 1071 grants the Bureau
general rulemaking authority for section 1071, providing that the
Bureau shall prescribe such rules and issue such guidance as may be
necessary to carry out, enforce, and compile data pursuant to section
1071.\19\ Section 1071, in 15 U.S.C. 1691c-2(g)(2), also permits the
Bureau to adopt exceptions to any requirement of section 1071 and to
conditionally or unconditionally exempt any financial institution or
class of financial institutions from the requirements of section 1071,
as the Bureau deems necessary or appropriate to carry out the purposes
of section 1071. The Bureau relies on its general rulemaking authority
under 15 U.S.C. 1691c-2(g)(1) in this proposed rule and relies on 15
U.S.C. 1691c-2(g)(2) when proposing specific exceptions or exemptions
to section 1071's requirements.
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\19\ 15 U.S.C. 1691c-2(g)(1).
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See the 2023 final rule for a more detailed discussion of the
CFPB's legal authorities.\20\
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\20\ See, e.g., 88 FR 35150, 35173-74.
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III. Discussion of the Proposed Rule
A. Summary of Proposed Rule
As set out above, the CFPB now proposes to reconsider certain
provisions of the 2023 final rule. The CFPB believes that a potentially
long-term data collection regime should start with a focus on core
lending products, lenders, small businesses, and data points. The CFPB
believes in retrospect that the approach it took in the 2023 final
rule--a broad initial coverage of lenders, products, small businesses
and data points--was not conducive to the long-term success of the data
collection regime under section 1071. The CFPB now believes that a
better, longer-term approach to advance the statutory purposes of
section 1071 would be to commence the collection of data with a
narrower scope to ensure its quality, and to limit, as much as
possible, any disturbance of the provision of credit to small
businesses. The CFPB believes that such an incremental approach would
also comply with section 1071 and minimize any negative initial impact
on small business lending markets and on data quality. In the future,
based on CFPB and industry experience during the early years of data
collection, the CFPB could consider amending the rule as appropriate to
further the purposes of section 1071.
The CFPB also believes that the 2023 final rule has not created
significant reliance interests that would dissuade the Bureau from
reconsidering its position as to certain portions of the rule.
Litigation challenging provisions of the 2023 final rule and delays in
the compliance dates for this rule suggest that reconsideration of the
specific issues below would not meaningfully change compliance
obligations.
Covered credit transactions. The CFPB believes that the initial
iterations of data collection under the rule should focus on the core,
widely used lending products most likely to be foundational to small
businesses' formation and operation. The CFPB therefore proposes to
exclude merchant cash advances (MCAs), agricultural lending, and small
dollar loans from the definition of covered credit transaction.
Covered financial institutions. The CFPB believes that the initial
iterations of data collection under the rule should focus on larger
core lenders. The CFPB therefore proposes two changes to the covered
financial institution definition: first, to exclude FCS lenders from
coverage; and second, to raise the origination threshold from 100 to
1,000 covered credit transactions for each of two consecutive years.
The CFPB is also proposing conforming changes to the bona fide error
portions of the enforcement provisions in the rule.
Small business. The CFPB believes that the focus of the rule, at
least initially, should be truly small businesses. The CFPB therefore
proposes to change the gross annual revenue threshold in the rule's
definition of small business from $5 million or less to $1 million or
less.
Data points. The CFPB believes that the initial iterations of data
collection under the rule should focus on core data points and be
consistent with other executive agency directives concerning the
collection of demographic data.
The CFPB therefore intends to focus data collection on data points
specifically identified in section 1071 and a limited number of other
data points needed to facilitate the collection of these statutory data
points. The CFPB proposes to remove the discretionary data points for
application method, application recipient, denial reasons, pricing
information, and number of workers. The CFPB also proposes changes to
comply with an executive branch mandate, which would result in a
modification of the collection of data concerning business ownership
status of small business applicants and the format of demographic data
collected concerning the principal owners of a small business.
Time and manner of data collection. The CFPB proposes changes to
the provisions on the time and manner of data collection, to remove
certain requirements that are not statutorily required and appear to
anticipate or presume non-compliance with the rule. The CFPB also
proposes to add a provision that would emphasize for applicants their
statutory rights under the rule.
Compliance dates. Finally, in light of these other proposed changes
to the rule, the CFPB proposes to extend the rule's compliance date
provisions to January 1, 2028 for all financial institutions that
remain covered by the rule, and to make other simplifying and
streamlining changes.
The CFPB also addresses in this summary two other issues.
Privacy and data publication. The CFPB does not address in this
proposal the privacy discussions in the 2023 final rule or its
statements about the eventual publication of data. The 2023 final rule
did not purport to make any final or binding decisions concerning its
privacy analysis, instead announcing only its ``preliminary assessment
of how it might appropriately assess and advance privacy interests by
means of selective deletion or modification'' of data. The 2023 final
rule also did not reach conclusions regarding the procedural vehicle it
would use to convey its decisions with respect to privacy.\21\ Nor
[[Page 50955]]
has CFPB conclusively announced a timeline for the publication of
application-level data, except for observing that it would need a full
year's worth of data to conduct the necessary privacy analysis. The
CFPB also suggested that it intended to publish aggregate data in the
first year of receiving data, and before publishing any application-
level data. The CFPB is currently reconsidering all of these issues and
preliminary findings, will continue to engage with stakeholders, and
will address these issues and findings going forward in a timely
fashion.
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\21\ Id. at 35460 (``The CFPB is not determining its final
approach to protecting such interests via pre-publication deletion
and modification because it lacks the reported data it needs to
finalize its approach and it does not see comparable datasets to use
for this purpose. In light of comments received on the NPRM's
privacy analysis, this part VIII offers a preliminary assessment of
how it might appropriately assess and advance privacy interests by
means of selective deletion or modification. The CFPB is not at this
point identifying the specific procedural vehicle for effecting its
privacy assessment. With respect to both substance and process, it
will continue to engage with external stakeholders; and it intends
to invite further input on how it plans to appropriately protect
privacy in connection with publishing application-level data.'').
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As part of eventual data publication, as with HMDA data, the CFPB
intends to note to data users that data alone are generally not used to
determine whether a lender is complying with fair lending laws. The
data do not include all the legitimate credit risk considerations for
loan approval and loan pricing decisions. Therefore, when regulators
conduct fair lending examinations, they analyze additional information
before reaching a determination about an institution's compliance with
fair lending laws.
Grace period. The CFPB does not address the grace period policy
statement in this proposal. The CFPB does, however, announce its
intention to maintain the grace period for the same reasons articulated
in the 2023 final rule, as amended by the 2025 interim final rule, and
to alter the grace period to coincide with the new proposed compliance
date, if it is finalized.
The Bureau seeks comments on the general approach taken in this
proposal. The Bureau also seeks comment on its proposed exclusion or
reconsideration of the products, lenders, small business definition,
and data points identified below. Further, the Bureau requests comment
on the likely change in cost and complexity of data associated with
each of the specific proposed regulatory revisions identified below and
whether changes to the quality of data (e.g., better or worse data
quality), advances or is contrary to the purposes of section 1071.
Finally, the Bureau requests comment on whether the 2023 final rule has
created any reliance interests not otherwise identified in this
proposal.
B. Section 1002.104--Covered Credit Transactions and Excluded
Transactions
The CFPB believes that at the onset of data collection under
section 1071 the rule should focus on core, generally applicable,
lending products that are most likely to be foundational to small
businesses' formation and operation--loans, lines of credit, and credit
cards--before determining whether to expand the scope of the rule to
include more niche or specialty lending products. The CFPB therefore
proposes to exclude MCAs, agricultural lending, and small dollar loans
from the definition of covered credit transaction to better ensure the
smooth operation of the initial period of data collection, while
minimizing disruptions and regulatory complexity in the credit markets
subject to section 1071.
1002.104(b)(7)--Merchant Cash Advance
Current Sec. 1002.104(a) defines a ``covered credit transaction''
as ``an extension of business credit that is not an excluded
transaction under paragraph (b) of this section.'' Section
1002.104(b)(1)-(6) enumerates six types of transactions that are
excluded from covered credit extensions. The Bureau proposes adding
MCAs to the list of excluded transactions in Sec. 1002.104(b).
Proposed Sec. 1002.104(b)(7) would exclude MCAs, which it would define
as an agreement under which a small business receives a lump-sum
payment in exchange for the right to receive a percentage of the small
business's future sales or income up to a ceiling amount.\22\
Consistent with this proposed new exclusion, the CFPB proposes deleting
several references to MCAs, and the related term sales-based financing,
in commentary.
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\22\ R. & R. on Cross Mots. for Summ. J. at 4, Revenue Based
Finance Coalition v. CFPB et al., No. 1:23-CV-24882-DSL (S.D. Fla.
Feb. 17, 2025).
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In the 2023 final rule, the CFPB explained its belief that the
statutory term ``credit'' in ECOA is intentionally broad so as to
include a wide variety of products without specifically identifying any
particular product by name, such that all credit products should be
included in the rule unless the CFPB specifically excluded them and
concluded that ``credit'' encompasses MCAs. It further explained that
MCAs should not be understood to constitute factoring within the
meaning of the existing commentary to Regulation B subpart A or the
definition in existing comment 104(b)-1, because factoring involves
entities selling an existing legal right to payment from a third party,
while no such contemporaneous right exists in an MCA. The CFPB also
noted its understanding that, as a practical matter, MCAs are
underwritten and function like a typical loan (i.e., underwriting of
the recipient of the funds; repayment that functionally comes from the
recipient's own accounts rather than from a third party; repayment of
the advance itself plus additional amounts akin to interest; and, at
least for some subset of MCAs, repayment in regular intervals over a
predictable period of time), although it also implicitly acknowledged
practical differences between MCAs and conventional loans by including
numerous provisions intended to capture MCA-specific data.
This proposal reconsiders the CFPB's previous conclusions, as
illustrated in existing comment 104(a)(1)-1, which does not exclude
MCAs from the definition of ``covered credit transactions'' under Sec.
1002.104(a), for several independent reasons.
First, the CFPB believes that at the onset of the data collection
under section 1071 the focus should be on core lenders and products
before the CFPB considers expanding the scope of the rule. MCAs are
structured differently from traditional lending products; traditional
lending concepts like ``interest rate'' do not fit the way that MCAs
are priced.\23\ As a result, it is not clear that data collection on
MCA transactions under section 1071 would yield information that
advances section 1071's statutory purposes to the extent that some or
many such transactions do not constitute credit. The CFPB believes it
would advance the purposes of section 1071 at this time to exclude MCAs
from the definition of covered credit transaction, and to focus on
ensuring the smooth operation of data collection as to core lending
products and providers most likely to be foundational to small
businesses' formation and operation.
---------------------------------------------------------------------------
\23\ See current Sec. 1002.107(a)(12)(v) (providing for the
collection of data only applicable to merchant cash advance and
other sales-based financings subject to the rule).
---------------------------------------------------------------------------
Second, the CFPB believes it erred in prematurely determining that
collection of data on MCA transactions would serve section 1071's
statutory purposes by concluding that all MCAs constitute credit. The
2023 final rule's one-size-fits-all approach also does not take into
account the varied terms and features of MCAs across the market that
may be relevant to whether the products meet the definition of
``credit'' under ECOA, nor did it account for the fact that MCAs
[[Page 50956]]
are relatively new products whose features and practices may be
evolving, including in response to State regulation. Moreover, while
some State courts have analyzed whether some MCAs meet State law
definitions of ``debt'' or ``credit,'' there is a dearth of case law
analyzing whether MCAs meet ECOA's definition of ``credit.''
Excluding MCAs from the definition of ``covered credit
transaction'' would be consistent with the way the CFPB has already
treated leases, which also present close questions as to whether they
meet the definition of ``credit'' under ECOA. In the 2023 final rule's
analysis of leases,\24\ the CFPB acknowledged that some lease
transactions could constitute ``credit.'' But rather than include all
lease transactions in the 2023 final rule to ensure coverage of those
leases that did actually constitute credit and credit disguised as
leases, the CFPB determined that it would be able to monitor the market
for such products without including them in the 2023 final rule. The
CFPB proposes taking a similar approach to MCA transactions as it did
to leases.
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\24\ See, e.g., 88 FR 35150, 35240 (``The Bureau is not covering
leases under this final rule, as requested by some commenters. The
Bureau agrees that some business leases are structured like loans
and other credit but notes that a commenter's example of a small
business being able to retain leased equipment is an example of the
creation of a security interest, not a lease under final comment
104(b)-2.''); id. (``The Bureau appreciates commenters' concerns
that not covering leases could open a door to potential evasion and
lead to data gaps or fair lending problems. The Bureau believes that
it can observe the small business financing market for such abuses
and prevent them without including all leases in the rule. For
example, in considering financial institutions' compliance with the
rule, the Bureau intends to closely scrutinize transactions to
ensure that companies are appropriately categorizing and reporting
products as required by section 1071.'').
---------------------------------------------------------------------------
Further, the CFPB believes that the 2023 final rule's coverage of
MCAs does not take into account State law developments addressing
sales-based financing. Several States have legislation and/or
regulations in place addressing the MCA market and requiring providers
to disclose terms such as the total cost of capital and the financing
rate. Such laws provide key protections for users of MCAs and may shape
MCA terms and practices in ways that bear on the question of whether
they meet ECOA's definition of ``credit.'' \25\ While the 2023 final
rule referenced these pieces of State legislation, it did not consider
the extent to which the evolving landscape under State law rendered
premature a determination that including MCAs in the definition of
``covered credit transaction'' for purposes of mandating data
collection furthered section 1071's statutory purposes. The CFPB
believes that it would be advantageous to observe how State laws
address MCAs before the CFPB decides how, and whether, to collect data
regarding MCAs pursuant to section 1071.
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\25\ See, e.g., Conn. Pub. Act 23-201, Conn. Gen. Stat. sec.
36a-861 et seq. (2024) (creating a disclosure regime specific to MCA
and other sales-based financing transactions); Va. Code Ann. sec.
6.2-2230 et seq. (imposing licensing and disclosure requirements);
Utah Commercial Fin. Registration and Disclosure Act, Utah Code Ann.
sec. 7-27-102 and 7-27-202 (imposing licensing and disclosure
requirements).
---------------------------------------------------------------------------
Finally, while the final rule cited concerns about high costs and
predatory practices in the MCA market,\26\ those concerns may be
addressed by Federal and State law enforcement agencies through their
respective enforcement authorities.
---------------------------------------------------------------------------
\26\ At the same time the Bureau acknowledged that ``information
on merchant cash advance lending volume and practices is limited.''
88 FR 35150, 35220.
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The CFPB believes that taking into account the factors listed
above, the relative novelty and evolving landscape of the MCA industry
and the ongoing changes at the State level concerning the regulation of
MCAs, that excluding MCA transactions from coverage under the rule at
this time is necessary and appropriate to carry out the purposes of
section 1071. As explained above, MCAs differ in kind from traditional
lending products, such that collecting data on MCA transactions under
Section 1071 may not produce information that is comparable to data
collected on other types of transactions. And because MCAs have not
generally been regulated as credit, many smaller MCA providers may lack
the infrastructure needed to manage compliance with regulatory
requirements associated with making extensions of credit. Taken
together, requiring MCAs to be reported could lead to data quality
issues, which would not advance the purposes of section 1071.
The CFPB will continue to monitor developments in the markets for
MCAs and other sales-based financing to determine whether over time a
subset might be appropriately included in the definition of ``covered
credit transaction'' for purposes of data collection.
The CFPB seeks comment on this proposed revision to the rule. It
also seeks comment on topics including, but not limited to, the extent
to which MCAs differ from or resemble traditional lending products; the
diversity of MCA terms and practices and how they impact whether MCAs,
or a subset of MCAs, meet the definition of ``credit'' under ECOA;
whether certain types of MCAs are more or less appropriate for
exclusion; and suggestions for how the 2023 final rule could be
modified with respect to MCAs if the CFPB ultimately does not exclude
them.
The CFPB further seeks comment on alternative definitions to the
one proposed in Sec. 1002.104(b)(7).
1002.104(b)(8)--Agricultural Lending
The CFPB proposes adding agricultural lending to the list of
excluded transactions under Sec. 1002.104(b). The CFPB proposes adding
new Sec. 1002.104(b)(8), which would define agricultural lending as a
transaction to fund the production of crops, fruits, vegetables, and
livestock, or to fund the purchase or refinance of capital assets such
as farmland, machinery and equipment, breeder livestock, and farm real
estate improvements. Consistent with this proposed addition, the Bureau
proposes deleting references to agricultural credit in current
commentary. This would simplify the rule by narrowing its scope to
core, generally applicable, small business lending products and avoid
covering a distinct and specialized lending sector that is already
subject to a different regulatory reporting scheme.\27\
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\27\ See proposed revisions to Sec. 1002.105(b) discussed below
that would also exclude FCS lenders from the definition of ``covered
financial institution.''
---------------------------------------------------------------------------
In the 2023 final rule, the CFPB declined to exclude agricultural
credit from its definition of a ``covered credit transaction.'' It
noted that ECOA itself has no exceptions for agricultural credit, that
agricultural businesses are included in section 1071's statutory
definition of small business (defined by cross-reference to the Small
Business Act), and that there have been instances of discrimination in
agricultural lending. It rejected comments asserting that agricultural
credit is unique and not comparable to other types of small business
lending, instead observing that ``every small business industry has its
own unique characteristics.'' \28\ In response to commenters expressing
concern about the impact on local community financial institutions and
an outsized effect on the cost of credit for farmers, the CFPB
emphasized that it was increasing its institutional coverage threshold
to 100 annual originations, from the 25 originations it had originally
proposed. The CFPB mentioned that many agricultural lenders have
already been required to
[[Page 50957]]
collect and report some form of data by HMDA, the Community
Reinvestment Act (CRA), and/or the Farm Credit Administration (FCA),
but did so only to note that lenders accordingly should be able to
adapt to the CFPB's new data collection requirements.
---------------------------------------------------------------------------
\28\ 88 FR 35150, 35227.
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The CFPB now believes that excluding agricultural lending from the
definition of ``covered credit transaction'' would advance the
statutory purposes of section 1071 at this early phase as the CFPB
begins the collection of small business lending data. Most notably,
typical agricultural lending differs markedly from other types of
commercial lending. Agricultural loans are often secured by biological-
based assets such as crops or livestock, which are subject to variables
and risk from weather and disease. These characteristics create unique
underwriting challenges that make such loans difficult to compare to
those in other industries. The 2023 rule did not adequately consider
these distinctions and the quality of data stemming from such
transactions. Indeed, other data collection regimes, such as CRA
regulations, appear to acknowledge categorical differences between
loans to small businesses generally and loans to small farms.\29\
---------------------------------------------------------------------------
\29\ Compare, e.g., 12 CFR 25.12(v) (OCC CRA regulations
defining small business loans) with Sec. 25.12(w) (OCC CRA
regulations defining small farm loans).
---------------------------------------------------------------------------
Second, agricultural lending is already subject to an existing
Federal data collection framework, one that is tailored to this
particular sector. The FCA conducts a substantial amount of
agricultural lending through a nationwide network of Congressionally
chartered, borrower-owned cooperatives. This system is subject to
extensive oversight by the FCA. Among other things, the FCA collects
demographic data including race, ethnicity, and gender from applicants
as part of its program oversight, in contrast to other forms of small
business lending where such data collection was not permissible under
Sec. 1002.5 of Regulation B until the promulgation of the 2023 final
rule.\30\ Further, under CRA regulations, institutions must report data
on lending to small farms alongside reporting their lending to small
businesses. The 2023 final rule did not adequately consider these
distinctions.\31\
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\30\ See FSA Customer Data Worksheet (Form AD-2047).
\31\ As the CFPB acknowledged in the 2023 final rule, ``many
agricultural lenders have already been collecting and reporting some
form of data by HMDA, the CRA, and/or the Farm Credit
Administration.'' 88 FR 35150, 35227.
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The CFPB believes upon reconsideration that the fact that
agricultural lenders are already reporting information to other
agencies supports its conclusion that excluding agricultural lending is
necessary or appropriate to carry out the purposes of section 1071 to
avoid imposing new, overlapping reporting requirements on agricultural
lenders at this point when the CFPB is commencing the collection of
data under this rule. The Bureau believes that excluding agricultural
lending would further the purposes of section 1071 because such an
exclusion would limit potential issues with data quality. Compliance
may pose greater difficulties for small agricultural lenders, which are
often rural entities with less compliance infrastructure than other
lenders, potentially impacting the quality of their data, and they may
need to divert their limited resources from lending activities.
Further, for lenders that provide both agricultural and non-
agricultural loans that would still be subject to coverage, the CFPB
believes that such lenders would be better situated to focusing their
section 1071 reporting efforts on improving the quality of data for
more core lending products.
Given these factors, the CFPB believes it would be appropriate to
reconsider the rule's application to agricultural lending to focus on
conventional, generally applicable small business lending at this time,
and to use its exemption authority under 15 U.S.C. 1691c-2(g)(2) to
exclude agricultural lending from coverage under the rule.
The CFPB seeks comment on this proposed revision to the rule. It
seeks comment on topics including, but not limited to, the definition
of agricultural lending; the extent to which agricultural lending
differs from or resembles other types of lending; and whether specific
types of agricultural lending are more or less appropriate for
exclusion.
1002.104(b)(9)--Small Dollar Business Credit
The CFPB proposes adding small dollar business credit to the list
of excluded transactions under Sec. 1002.104(b). Proposed Sec.
1002.104(b)(9) would exclude from the definition of covered credit
transaction a transaction in an amount of $1,000 or less, to be
adjusted for inflation over time.
In the 2023 final rule, the CFPB declined commenters' suggestions
that it exempt credit transactions below a certain threshold;
commenters had suggested exemption thresholds ranging from $25,000 to
$10 million, on the grounds that it would help smaller institutions
continue to make credit available. The CFPB explained that it was not
adopting an exemption because of the significant volume of small
business lending involving credit amounts below the threshold levels
proposed by commenters.
The CFPB now believes that an exclusion for the smallest loans--
well under the thresholds suggested by commenters in the 2023 final
rule--is necessary or appropriate to carry out the purposes of section
1071. Indeed, in considering comments regarding larger exemption
thresholds, the 2023 final rule did not explicitly address an exemption
for loans under $1,000.
The CFPB believes that the collection of data on such loans, to the
extent that they exist, are more likely to result in poor data quality
for purposes of any analyses in furtherance of the statutory purposes
of section 1071, given that small businesses will generally require
much larger loans to begin or operate their businesses. Typically, very
small loans below $1,000 would be satisfied by consumer credit options
and small non-profit lenders who lack infrastructure to support
regulatory compliance. Consequently, data collected from smaller
transactions may not provide meaningful insight into the practices of
most core lenders to small businesses.
Further, requiring data reporting on loans of $1,000 or less may
make offering such small credit products uneconomical for lenders.
Detailed data collection and reporting requirements are likely to
impose operational complexity, which would make producing quality data
difficult for smaller financial institutions. The CFPB is concerned
that this could impact data quality.
Moreover, the CFPB believes, based on its experience and
understanding of the markets, that many lenders treat transactions
under $1,000 as consumer credit, rather than business credit. Further,
$1,000 is substantially lower than loan amounts already characterized
as ``microloans'' to businesses. The CFPB understands that loans in
such amounts are not material for the small business lending markets.
For example, the Small Business Administration (SBA) offers business
credit that it characterizes as ``microloans,'' which are generally for
loan amounts under $50,000 and an average loan amount of $13,000.\32\
Further, several commenters in the 2023 final rule requested that the
CFPB carve out loans under $50,000 to
[[Page 50958]]
$100,000 as microloans.\33\ Some State-run programs offer business
credit that start at a minimum loan amount of $1,000.\34\ The CFPB
believes that it seems unlikely that many such small dollar loans under
$1,000 to small businesses are made, and if so the collection of such
data would not advance the statutory purposes of the rule.
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\32\ See Small Bus. Admin., Microloans, <a href="https://www.sba.gov/funding-programs/loans/microloans">https://www.sba.gov/funding-programs/loans/microloans</a> (last visited Oct. 1, 2025).
\33\ 88 FR 35150, 35245.
\34\ See, e.g., Md. Dep't. of Com., Military Personnel and
Veteran-owned Small Business Loan Program (MPVOLP), <a href="https://commerce.maryland.gov/fund/programs-for-businesses/mpvolp">https://commerce.maryland.gov/fund/programs-for-businesses/mpvolp</a> (last
visited Sept. 10, 2025) (providing no interest loans, ranging from
$1,000 to $100,000, for businesses owned by military reservists,
veterans, National Guard personnel and for small businesses that
employ or are owned by such person).
---------------------------------------------------------------------------
The CFPB seeks comment on this proposed revision to the rule. It
seeks comment on topics including, but not limited to, the loan amount
at which the exclusion for small dollar business credit should be set;
whether the exclusion should be limited to certain types of loan
products, financial institutions, or small businesses; the extent to
which financial institutions lend to small businesses in amounts less
than $1,000 and why they do so; and whether the exclusion should
account for a lender extending multiple small dollar loans to a single
small business.
C. Section 1002.105--Covered Financial Institutions and Exempt
Institutions
The CFPB believes that at the onset of data collection under
section 1071 the focus should be on larger core lenders before the CFPB
considers whether it would be appropriate to expand the scope of the
rule to specialty lenders and smaller lenders. The CFPB therefore
proposes to exclude FCS lenders from the definition of covered
financial institution and proposes to raise the origination threshold
from 100 to 1,000 covered credit transactions to better ensure the
smooth operation of the initial period of data collection.
105(b) Covered Financial Institution--FCS Lenders
The CFPB proposes excluding FCS lenders from the ``covered
financial institution'' definition in Sec. 1002.105(b). Consistent
with this proposed exemption, the CFPB proposes deleting several
references to FCS lenders in commentary.
As with the Bureau's proposal to reconsider the treatment of
agricultural transactions as covered transaction under Sec.
1002.104(a), this proposal would simplify the rule by narrowing its
scope to core small business lending practices and lenders. The
proposal would also avoid imposing reporting requirements on a category
of specialized lenders that are already subject to a separate
regulatory reporting scheme.
The CFPB believes that an exemption for FCS lenders would advance
the statutory purposes of section 1071. FCS lenders have a unique
mission-driven structure, and they operate in a specific regulatory
environment.
FCS lenders differ from traditional financial institutions in
several significant respects. The FCS is comprised of a nationwide
network of borrower-owned, cooperative institutions with a statutory
mandate to provide the agricultural sector with reliable credit. FCS
borrowers include agricultural and related businesses as well as rural
homeowners. As owners of the FCS lending associations, these borrowers
can receive patronage dividends that can reduce borrowing costs and
make FCS loans difficult to compare to loans issued by non-FCS lenders.
Commercial banks, by contrast, are owned by shareholders, and credit
unions, while member-owned, serve a wide range of customers, provide a
wide range of products and services, and lack a specific charter that
is exclusively focused on agriculture. These differences between FCS
lenders and other types of lenders, which the CFPB did not meaningfully
address in the 2023 final rule, make it difficult to easily compare
loans made by FCS lenders with those of other non-cooperative lenders.
In addition to their unique nature and mission, as described above,
FCS lenders are also already subject to an existing regulatory
reporting framework through the FCA, including the collection of
demographic data as part of its program oversight.\35\
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\35\ See also 88 FR 35150, 35227 (noting that many agricultural
lenders currently required to collect and report data to FCA).
---------------------------------------------------------------------------
In issuing the 2023 final rule, the Bureau explained the decision
not to categorically exempt any specific type of financial institution
from the rule's coverage, stating that such exemptions ``would create
significant gaps in the data and would create an uneven playing field
between different types of institutions.'' \36\ The CFPB did not appear
to meaningfully consider the extent to which FCS lending differs in
kind from general-purpose lending.
---------------------------------------------------------------------------
\36\ Id. at 35258.
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However, in light of the CFPB's reconsideration of the 2023 final
rule and new focus on ensuring the consistent and smooth initial
collection of data from core lenders and products, the CFPB believes it
would further the purposes of section 1071 to commence the data
collection without including FCS lenders.
The existing reporting requirements of FCS lenders further supports
excluding FCS lenders.\37\ Moreover, requiring compliance with a second
set of potentially redundant reporting obligations may put FCA lenders
at a competitive disadvantage relative to other lenders.
---------------------------------------------------------------------------
\37\ For instance, the FCA already tracks data on the credit
needs of young, beginning, and small (YBS) farmers and ranchers.
Farm Credit Admin., Young, beginning, and small farmer lending,
<a href="https://www.fca.gov/bank-oversight/young-beginning-and-small-farmer-lending">https://www.fca.gov/bank-oversight/young-beginning-and-small-farmer-lending</a> (last visited Sept. 28, 2025) (``[E]ach [FCS] institution is
required to report to FCA yearly on operations and achievements
under its YBS program and to disclose YBS data in its own annual
report.'').
---------------------------------------------------------------------------
The CFPB believes that the rule's current application to FCS
lenders risks imposing disproportionate regulatory complexity on them,
many of which are small, rural cooperatives lacking the compliance
infrastructure of large commercial lenders, which in turn risks
diminishing the quality of the data they report to CFPB. Adding
potentially redundant reporting requirements would do little to advance
the goals of section 1071. Such a result would be counter to the
Congressional goals behind the establishment of the FCS.
Based on the factors discussed above, the CFPB believes it would be
appropriate to reconsider the rule's application to FCS lenders and to
focus the rule's scope on conventional, general-purpose small business
lending. Accordingly, the Bureau proposes to use its exemption
authority under 15 U.S.C. 1691c-2(g)(2) to exclude FCS lenders.
The CFPB seeks comment on this proposed revision to the rule.
105(b) Covered Financial Institution--Threshold Change
Current Sec. 1002.105(b) defines a covered financial institution
as one that has made at least 100 covered credit transactions to small
businesses in each of the two preceding calendar years. The CFPB is
proposing to change this definition by increasing this threshold from
100 covered credit transactions to 1,000 covered credit transactions
because it believes that it would advance the statutory purposes of
section 1071 to commence the data collection without including smaller
lenders under a 1,000 originations threshold.
In the 2023 final rule, the CFPB explained its belief that a 100-
loan origination threshold would best address widespread industry
concerns regarding compliance burdens for the smallest financial
institutions while also
[[Page 50959]]
capturing the overwhelming majority of the small business lending
market. It noted that while its original proposal of a 25-loan
threshold would have yielded more data than a 100-loan threshold, the
100-loan origination threshold ``massively expands data availability
relative to the status quo.'' \38\ The CFPB noted that a number of
commenters on the 2021 proposed rule requested a higher threshold, such
as 1,000 covered credit transactions. At that time, the CFPB was
concerned that a threshold higher than 100 covered credit transactions
would dramatically reduce the number of covered financial institutions
that must report data under the rule. However, as the CFPB noted in the
2023 final rule, a large decrease in the number of covered financial
institutions does not equate to a proportionately large reduction in
the estimated number of small business credit applications reported.
---------------------------------------------------------------------------
\38\ 88 FR 35150, 35257.
---------------------------------------------------------------------------
As a result, the CFPB believes that the proposed 1,000 originations
threshold is justified for several independent reasons. First, the CFPB
believes that at the onset of the data collection under section 1071
the focus should be on core lenders and products before the CFPB
considers whether it would be appropriate to expand the scope of the
rule. The CFPB believes that larger volume lenders are core to small
business lending. Current Sec. 1002.114(b), by way of comparison,
prioritized the collection of data from the largest volume lenders
first because they have more resources, and because they account for
the bulk of small business lending volume.\39\
---------------------------------------------------------------------------
\39\ See id. at 35438-40.
---------------------------------------------------------------------------
Second, the proposed change better aligns with E.O. 14192,\40\
which directs Federal agencies to review regulations for regulatory
burden, and is responsive to feedback received from stakeholders
following publication of the 2023 final rule. The CFPB has heard
repeatedly from industry stakeholders that its estimates in the 2023
final rule were wrong, and that a 100-loan origination threshold is too
low and captures too many smaller institutions, which they say
originate fewer small business loans and also are less able to shoulder
the costs and complexity of complying with the rule due to fewer
resources and staff.
---------------------------------------------------------------------------
\40\ 90 FR 9065 (Feb. 6, 2025).
---------------------------------------------------------------------------
The Bureau preliminarily determines that changing the originations
threshold to 1,000 strikes a better balance by minimizing complexity
for smaller entities while still collecting data on a large proportion
of small business credit applications; indeed, as the Bureau observed
with respect to the 100-loan threshold in the 2023 final rule, a 1,000-
loan threshold would substantially increase data availability as
compared to the status quo.
The CFPB believes a threshold of 1,000 originations, instead of
100, would be congruent with the statutory purposes of section 1071.
The CFPB believes that the onset of data collection should commence
with core products and lenders, as larger lenders are better resourced
and can better sustain the complexities and cost of compliance with the
rule. The CFPB believes that it should work with larger lenders to
better understand potential difficulties associated with collecting
data before considering whether to expand the rule to require that
smaller lenders comply with the rule.
Further, the CFPB also notes from its research that the proposed
change in the threshold for originations would result in a reduction in
the number of smaller institutions covered by the rule without a
proportionately large reduction in the number of loan application-level
data collected by the rule.\41\ While the proposed 1,000 originations
threshold would carve out a large number of mostly smaller depository
institutions, the rule would still cover the vast majority of small
business loan originations (well over 90 percent).
---------------------------------------------------------------------------
\41\ See part IV.D, tables 1 and 2 below.
---------------------------------------------------------------------------
Given this the CFPB believes increasing the threshold would remove
regulatory burden from small entities, and therefore the proposed
change would be responsive to E.O. 14192.
The CFPB believes that increasing the threshold is necessary or
appropriate to carry out the purposes of section 1071 because the
complexity of compliance may pose difficulties for smaller lenders,
many of which have no previous experience at all with data collection
rules such as HMDA or CRA. The new compliance complexity may result in
decreased data quality for those institutions, which would not advance
the statutory purposes of section 1071.
The proposed change to Sec. 1002.105(b) would, in turn, require
other changes. Current Sec. 1002.112(b) provides that a bona fide
error is not a violation of ECOA or Regulation B, subpart B. The
provision cross-references numerical error thresholds in current
appendix F. Under appendix F, a financial institution is presumed to
maintain procedures reasonably adapted to avoid errors with respect to
a given data field if the number of errors found in a random sample of
a financial institution's data submission for a given data field do not
equal or exceed the threshold in column C of table 1 of appendix F.
The CFPB proposes revising appendix F to conform to the proposed
changes to Sec. 1002.105(b), defining ``covered financial
institution,'' based on a revised origination threshold of 1,000
covered credit transactions. Specifically, column A of existing
appendix F lists ranges of small business lending application register
counts. The CFPB proposes eliminating the rows in table 1 associated
with application counts under 1,000, and revising the count in what is
currently the 4th row to be ``1,000-100,000'' rather than the current
``500-100,000.'' The CFPB requests comment on these proposed changes.
The CFPB seeks comment on this proposed revision to the rule, in
particular whether an originations threshold at 200, 500, 2,000, or
some other number would be appropriate, and whether the associated
changes to appendix F are appropriate.
D. Section 1002.106--Business and Small Business
106(b) Small Business
Current Sec. 1002.106(b)(1) defines ``small business'' and
provides, among other criteria, that a business is small if its gross
annual revenue for its preceding fiscal year is $5 million or less.
Section 1002.106(b)(2) provides procedures for inflation adjustments to
that threshold. For the reasons discussed below, the CFPB is proposing
to reduce the gross annual revenue threshold from $5 million or less to
$1 million or less.
In the 2023 final rule, the CFPB explained that its definition
reflected the need for financial institutions to apply a simple, broad
definition of a small business across industries. It also explained its
belief that a $5 million gross annual revenue threshold strikes the
right balance in terms of broadly covering the small business financing
market while meeting the SBA's criteria for an alternative size
standard. It noted that it did not propose a $1 million gross annual
revenue threshold out of concern that such a threshold likely would not
satisfy the SBA's requirements for an alternative size standard across
industries, while also observing that a $1 million threshold would
better align with existing Regulation B adverse action notification
requirements. It also concluded that a $1 million threshold would
exclude many businesses that should be characterized as small.
The CFPB will retain the use of a simple, broad definition of a
small business across industries but is
[[Page 50960]]
proposing to change the gross annual revenue threshold from $5 million
or less to $1 million or less, and to make conforming changes
throughout the regulatory text and commentary. The CFPB is seeking SBA
approval for this alternate small business size standard pursuant to
the Small Business Act.\42\
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\42\ 15 U.S.C. 632(a)(2)(C).
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Since the 2023 final rule was published, the President issued E.O.
14192.\43\ As part of the CFPB's review of the 2023 final rule under
this order, the CFPB identified that a $1 million threshold would help
reduce regulatory burden on financial institutions because it would
better align with other existing financial regulatory requirements and
standard financial industry practices related to small businesses.
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\43\ 90 FR 9065.
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Specifically, the CFPB believes several independent reasons justify
a change of the gross annual revenue threshold to $1 million. First, as
noted by commenters on the CFPB's 2021 proposed rule, a $1 million
threshold would align with certain metrics in CRA regulations. Several
CRA tests analyze lending to ``smaller businesses'' with $1 million or
less in revenues.\44\ The CFPB finalized the $5 million threshold in
the 2023 final rule, and the Federal agencies responsible for
implementing the CRA proposed and subsequently finalized amendments to
their small business revenue threshold to $5 million, to conform with
the CFPB's rule implementing section 1071, and to use data collected
pursuant to that rule. Since then, however, the CRA agencies have
proposed withdrawing those revisions, which never entered into force.
The CRA agencies proposed reverting back to a $1 million or less
definition, and no longer using section 1071 data in certain CRA tests
concerning small businesses.\45\ The CFPB believes that it should
follow suit to reduce avoidable regulatory complexity for regulated
entities by sharing where possible a uniform size standard with other
Federal agencies.
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\44\ ``Smaller business'' loans are a subset of ``small
business'' loans as defined by CRA regulations before the 2024
amendments. ``Small business'' loans are those with a loan amount of
$1 million or less to a business of any size under CRA regulations.
12 CFR 25.12(v) (``small business loan means a loan included in
`loans to small businesses' as defined in the instructions for
preparation of the Consolidated Report of Condition and Income'');
Fed. Fin. Insts. Examination Council, Schedule RC-C, Part II. Loans
to Small Businesses and Small Farms General Instructions (defining
``loans to small businesses'' as loans with original amounts of $1
million or less), <a href="https://www.fdic.gov/resources/bankers/call-reports/crinst-051/2017/2017-03-051-rc-c2.pdf">https://www.fdic.gov/resources/bankers/call-reports/crinst-051/2017/2017-03-051-rc-c2.pdf</a> (last visited Sept.
30, 2025). ``Smaller business'' loans are ``small business'' loans
made to business with $1 million or less in revenues under the 1995
amendments to CRA regulations. See 12 CFR 25.22(b)(3)(ii) (assessing
the lending activity of an institutions of ``small business and
small farm loans to businesses and farms with gross annual revenues
of $1 million or less'').
\45\ The Federal agencies responsible for implementing the CRA
amended the regulations in 2024 to change the relevant threshold
from $1 million to $5 million to conform with the CFPB's rule
implementing section 1071. 89 FR 6574 (Feb. 1, 2024). These agencies
have subsequently issued a joint notice of proposed rulemaking that
would rescind the 2024 amendments to the CRA regulations, reverting
back to the 1995/2001 version of the CRA regulations. 90 FR 34086
(July 18, 2025).
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Second, the CFPB also believes that the revised threshold in
proposed Sec. 1002.106(b) would be more consistent with Regulation B,
subpart A, further helping to reduce regulatory burden pursuant to E.O.
14192.\46\ As noted in the 2023 final rule, Regulation B, subpart A
uses a $1 million revenue threshold to determine what kind of adverse
action notice a business credit applicant receives; those under the
threshold receive a notification similar to one a consumer would
receive.\47\ As a result, many covered financial institutions likely
already apply a $1 million threshold to determine which businesses are
small. Here, the CFPB believes that using an existing size standard
would reduce regulatory complexity for covered financial institutions.
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\46\ 90 FR 9065 (Feb. 6, 2025).
\47\ See 88 FR 35150, 35186.
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Third, as many financial institutions have worked on implementing
the 2023 final rule, the Bureau has received more feedback, including
from a number of community banks and trade groups representing larger
institutions, that a $1 million revenue threshold would more closely
align with their internal thresholds that separate small and medium-
sized businesses within their own institutions.
The CFPB notes that the 2023 final rule adopted a $5 million
threshold in significant part because it believed that a $1 million
threshold, discussed as an alternative to the $5 million threshold,
would not satisfy the SBA's requirements for an alternative size
standard and would exclude too many businesses designated as small
under the SBA's size standards. Whether an alternative size standard
satisfies the requirements for an alternative size standard is within
the SBA's purview to determine, and as noted above the CFPB is seeking
SBA approval for its proposed $1 million threshold.
Further, as commenters initially stated, a $1 million threshold
would cover most (over 95 percent) of small businesses as defined by
the SBA size standards in effect at the time of the 2021 proposed rule.
The CFPB estimated in the 2023 final rule that among non-agricultural
industries over 1.5 million small businesses (27 percent) would not be
covered by an alternative $1 million gross annual revenue
threshold.\48\ The CFPB is now reconsidering the data provided by
commenters and its final rule estimate. In any case, the CFPB believes
that a change to $1 million is consistent with the alignment goals
noted above given the E.O.s discussed throughout, even if a 27 percent
decline in small business coverage would result. At a $1 million
threshold, the proposed rule would still cover a supermajority of small
businesses that the 2023 final rule covers.
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\48\ Id. at 35266.
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The CFPB is proposing conforming changes also to the inflation
adjustment provision in Sec. 1002.106(b)(2), to require adjustment in
$100,000 increments (rather than $500,000) every five years after 2030
(rather than 2025). The CFPB is concerned that, given the proposed
change to a $1 million revenue threshold, inflation adjustments in
$500,000 increments would not be granular enough for this provision to
meaningfully track inflation.
The Bureau seeks comment on the proposed changes to Sec.
1002.106(b)(1) and (b)(2), including whether revenue thresholds of
$500,000, $2 million, $3 million, or some other amount would be
appropriate.
E. Section 1002.107--Compilation of Reportable Data
107(a) Data Format and Itemization
107(a) Discretionary Data Points
Section 1071 provides for two types of data points, those
statutorily required under ECOA section 704B(e) and those promulgated
based on Bureau discretion provided for in ECOA section 704B(e)(2)(H),
which are sometimes referred to as discretionary data points, and which
the Bureau has authority to add if the ``Bureau determines [they] would
aid in fulfilling the purposes of this section.'' In the 2023 final
rule, the Bureau finalized several discretionary data points,
determining the additional data would aid in fulfilling the purposes of
section 1071 of the Dodd-Frank Act, as required by ECOA section
704B(e)(2)(H). The discretionary data points were for pricing
information, time in business, North American Industry Classification
System (NAICS) code, number of workers, application method, application
recipient, denial reasons, and number of principal owners. The Bureau
considered the additional operational complexity and
[[Page 50961]]
potential reputational harm described by commenters that collecting and
reporting these data points could impose on financial institutions, but
determined that the costs were only incremental and that the data
points were designed to minimize additional compliance burden.\49\
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\49\ Id. at 35278.
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Notably, in the 2023 final rule the Bureau declined to add other
discretionary data points sought by commenters, because the decision
whether to include a discretionary data point necessarily also involves
considering the relative utility of a data point and the operational
complexity of adding it. For that reason, in 2023 the Bureau stated
that it was adopting a ``limited number of data points . . . that it
believes will offer the highest value in light of section 1071's
statutory purposes,'' and it rejected additional data points on the
grounds that they would pose ``operational complexities.'' \50\ For
example, the Bureau declined to include a data point on credit scores,
even though the data would be useful for fair lending analyses, due to
the complexity and operational difficulty of doing so.\51\
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\50\ Id. at 35281.
\51\ Id. at 35282.
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In other words, to be included as a discretionary data point, a
data point implicitly must satisfy two independent tests: (1) whether
the data point would aid in fulfilling the purposes of section 1071,
and (2) whether the CFPB believes based on the record before it that it
is appropriate to adopt as a discretionary data point given factors
such as operational cost and regulatory complexity. Accordingly, if the
Bureau now believes that the relative utility of the data is not strong
enough to justify the additional operational complexity for financial
institutions, that is sufficient reason to propose removing the
discretionary data point, even if the discretionary data point would
otherwise advance the purposes of the statute.
After the publication of the 2023 final rule, two factors prompted
reconsideration of the discretionary data points by the Bureau. First,
as discussed above, pursuant to E.O.s. 14192 and 14219 (``Ensuring
Lawful Regulation and Implementing the President's `Department of
Government Efficiency' Deregulatory Agenda''), the Bureau is reviewing
the 2023 final rule as part of its effort to streamline and simplify
regulations.\52\ The Bureau believes that removing some of the
discretionary data points would meet the goals of these E.O.s. Second,
subsequent to the publication of the 2023 final rule and through the
implementation process, the Bureau received additional feedback about
the number of data points total, and the logistical challenges
associated with implementing some or all of the discretionary data
points. The implementation feedback provided by stakeholders further
supports reconsideration of certain discretionary data points, and the
Bureau now believes that the 2023 final rule did not adequately
consider the extent to which the value of the data point justifies the
additional operational complexity in obtaining it.
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\52\ 90 FR 9065; 90 FR 10583 (Feb. 25, 2025).
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Given this new information, the Bureau proposes to remove the
discretionary data points for application method, application
recipient, denial reasons, pricing, and number of workers in Sec.
1002.107(a)(3), (4), (11), (12), (16), as well as the relevant
commentary, and to make conforming changes throughout.
The data points identified for removal are not statutorily required
and are not otherwise relied upon by or intertwined with the
statutorily required data points.\53\ In any case, because the
identified data points were finalized pursuant to the Bureau's
discretionary authority under 15 U.S.C. 1691c-2(e)(2)(H), it is also
within the bounds of that discretion to remove these data points. The
CFPB believes that their removal at this time, at the start of a
potentially long-term data collection regime, would advance the longer-
term statutory purposes of the rule. Stakeholders attempting to
implement the rule have suggested the addition of data points beyond
those statutorily required had led to unnecessary complexity in
implementing the 2023 final rule, and that such complexity might reduce
data quality and lead to additional errors. The CFPB preliminarily
concludes that initiating the data collection with an expansive rule
that covered more data points would tend to make the initial
collections more complicated and result in lesser data quality and
integrity.
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\53\ The Bureau is not proposing to remove NAICS code, time in
business, and number of principal owners because those discretionary
data points are generally integral to collection and understanding
of statutorily required data points and the Bureau did not receive
evidence during the implementation period of logistical challenges
not previously considered.
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The CFPB believes it prudent to focus on the collection of a more
limited number of core data points (the statutory data points and a
limited number of other data points needed to facilitate the collection
of these statutory data points) to avoid complexity in the initial
implementation of a rule to implement section 1071. This in turn would
make it more likely that covered financial institutions face a smoother
transition in the initial years of the rule in ramping up to the
accurate, recurring collection of data.\54\
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\54\ The Bureau notes that in its experience with new regulatory
regimes, especially new data collections such as the revisions to
HMDA in 2015, covered institutions face initial difficulties with
collecting and reporting data accurately, especially given the
expansive changes required by the 2015 HMDA rulemaking.
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Application method. The 2023 final rule required financial
institutions to collect data on whether applications were submitted in
person, by phone, online, or by mail. It explained its belief that this
data will improve the market's understanding of how different types of
applicants apply for credit and provide additional context for the
business and community development needs of particular geographic
regions. The Bureau now believes that this information is of relatively
low value in furthering the purposes of section 1071 while adding to
the overall complexity of a lengthy data collection, and thus should
not be included. Upon reconsideration, the Bureau believes that in the
2023 final rule, it had underestimated the potential complexity of this
data point. The Bureau acknowledged that many lenders do not already
collect this data point as such, and that many small business
applicants have multiple interactions across the different methods
listed (in-person, telephone, online) during the application process.
However, current Sec. 1002.107(a)(3) does not seem to address this but
rather appears to reduce the potentially complex set of interactions to
identifying only one means of collecting a covered application. The
logic of the 2023 final rule justifying this provision suggests the
futility of collecting this data point without capturing the full scope
of interaction between applicant and lender for purposes of this rule.
The Bureau believes, as a result, that at this time, this data point
should be removed because its utility does not outweigh the cost and
complexity of collecting it.
Application recipient. In the 2023 rule, the Bureau required
financial institutions to collect data on application method--whether
the applicant submitted the covered application directly to the
financial institution or its affiliate, or whether the applicant
submitted the covered application indirectly to the financial
institution via a third party. It explained
[[Page 50962]]
that this discretionary data point will improve the market's
understanding of how small businesses interact with financial
institutions when applying for credit, such as whether financial
institutions making credit decisions are directly interacting with the
applicant and/or generally operating in the same community as the
applicant. The Bureau now believes that this information is of
relatively low value in furthering the purposes of section 1071 while
adding to the overall complexity of a lengthy data collection. Upon
reconsideration, the Bureau believes that in the 2023 final rule, it
overestimated the utility and underestimated the cost and complexity of
this data point. The justification for this data point in the 2023
final rule suggested that it would help determine whether lenders were
operating in the communities with applicants but did not offer details
on why a data point on third-party submissions would advance such an
understanding, above and beyond the other data points more apparently
targeted to identify community development needs, such as census tract.
Further, in response to a comment that lenders do not track data on
application submissions by third parties because such data played no
role in underwriting decisions, the Bureau summarily replied that it
did not believe it would be difficult for lenders to track this
information. The Bureau believes that submissions through third parties
may not always be identified as such, and that its statement in the
2023 final rule justifying the inclusion of this data point did not
account for this. The Bureau as a result believes that at the start of
a potentially long-term data collection regime that this data point
should be removed.
Denial reasons. The Bureau explained in the 2023 rule that data on
denial reasons will allow data users to better understand the rationale
behind denial decisions, help identify potential fair lending concerns,
and provide financial institutions with data to evaluate their business
underwriting criteria and address potential gaps as needed. As the
Bureau acknowledged in the 2023 rule, reasons for denial data could be
harmful or sensitive for applicants or related natural persons. The
Bureau now believes that the sensitivity of this information, combined
with its addition to the overall complexity of a lengthy data
collection, justifies proposing to remove it from the discretionary
data points. The 2023 final rule did not explain how the marginal or
added usefulness of denial reasons would justify the added cost and
complexity above and beyond the collection of data on denials, already
captured by the mandatory ``type of action taken'' data point. Further,
to the extent that this data point was intended to assist lenders to
analyze their own fair lending concerns, as the 2023 final rule stated,
the data point is redundant as lenders already possess this
information. To the extent that this data point was intended to assist
applicants, under subpart A of Regulation B they are already able to
access a statement of denial reasons. Section 1002.9(a)(3) in subpart A
already requires lenders to inform applicants for business credit with
$1 million or less in gross annual revenue of their right to receive a
statement of denial reasons upon request. Upon reconsideration, the
Bureau believes that it is sufficient at this time to collect data on
denials via the action taken data point, as required under 15 U.S.C.
1691c-2(e)(2)(D), and that this data point should not be included at
the start of a potentially long-term data collection regime.
Pricing. In the 2023 rule, the Bureau required reporting of an
array of different pricing data: interest rate; total origination
charges; broker fees; the total amount of all non-interest charges that
are scheduled to be imposed over the first annual period; for a
merchant cash advance or other sales-based financing transaction, the
difference between the amount advanced and the amount to be repaid; and
information about any applicable prepayment penalties. It explained its
belief that because price-setting is integral to the functioning of any
market, any analysis of the small business lending market--including to
enforce fair lending laws or identify community and business
development opportunities--would be less meaningful without this
information. The 2023 rule acknowledge the potential complexity of
collecting this data, and commenters noted the risk that it could
reveal confidential business information or lead to incorrect
inferences about discrimination. The Bureau now believes that the
potential risk of harm to applicants and the substantial complexity of
the data collection justify removing it from the discretionary data
points. While the Bureau acknowledged comments ``about the harmful
consequences of potentially misleading data,'' the Bureau addressed
this concern in the 2023 final rule by stating that it would note
``when disclosing the 1071 data that the data alone generally do not
offer proof of compliance with fair lending laws.'' \55\ The Bureau
upon reconsideration believes that such a statement may not be
sufficient to address concerns about the misuse of pricing data. In
adopting the pricing data point, the Bureau assumed that community
groups would use data responsibly but did not address how other members
of the public with access to the data might use it.\56\ Further, the
2023 final rule stated that ``the 1071 data need not reflect every
determinant of credit pricing to provide value to users'' but also
acknowledged the relevant and importance of credit score of principal
owners to ``explain[] pricing differences between transactions.'' \57\
That is, the Bureau believes that the publication of pricing
information absent certain other information may be incomplete and give
rise to incorrect inferences concerning discrimination; however, the
collection of sufficient data points to correct potentially erroneous
inferences may make the data collection unduly complex. This
combination of difficulties leads the Bureau to believe that this data
point should not be included at the start of a potentially long-term
data collection regime.
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\55\ 88 FR 35150, 35310.
\56\ Id. at 35310.
\57\ Id.
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Number of workers. The 2023 rule required financial institutions to
report the number of workers in ranges, and stated that data on the
number of persons working for a small business applicant will provide
data users and relevant stakeholders with a better understanding of the
job maintenance and creation that small business credit provides. The
Bureau now believes that this information is of relatively low value in
furthering the purposes of section 1071 while adding to the overall
complexity of a lengthy data collection. First, in the 2023 final rule,
the Bureau acknowledged that ``[t]he majority of small businesses are
run by a single owner.'' Given the proposed change to Sec.
1002.106(b), revising the definition of small business to those
businesses with $1 million or less in gross annual revenue, fewer small
businesses with employees would be covered under the rule. Second, as
acknowledged in the 2023 final rule, small businesses may encounter
difficulties in providing this information to financial institutions,
especially small businesses that use contractors, temporary or gig
workers, or seasonal workers, or those that cycle through employees
frequently. While the Bureau simplified a covered financial
institution's reporting requirements for this data point, the Bureau
believes that even as simplified this data point's complexity outweighs
its potential utility. That is, the Bureau
[[Page 50963]]
now believes that it would be difficult to ensure consistency in
reporting this data point across a variety of different small business
applicants, making it likely that the data collected would be of poor
quality or otherwise difficult to interpret. Further, the 2023 final
rule justified this data point solely on community development grounds.
It did not justify this data point on fair lending grounds because
nothing in Regulation B, including subpart A, offers differential
protection based on a business credit applicant's number of workers.
Based on the Bureau's intention to commence this rulemaking regime
focused on truly small businesses, the Bureau believes that this data
point should not be included at the start of a potentially long-term
data collection regime as it is not likely to result in the collection
of useful data at this time.
LGBTQI+-owned business status. The 2023 rule required financial
institutions to inquire whether a small business applicant for credit
is a minority-owned, women-owned, and/or LGBTQI+-owned business. This
discretionary data point is addressed in more detail below in the
section on the Defending Women E.O.
The Bureau solicits comment on these proposed changes, including
whether any of the identified discretionary data points should be
modified or retained, in part or in full.
Collection of Disaggregated Ethnicity and Race Categories
Current Sec. 1002.107(a)(19) requires the collection of both
aggregate and disaggregated race and ethnicity information on principal
owners of small business applicants. However, 15 U.S.C. 1691c-
2(e)(2)(G) only requires covered lenders to collect and report the
``race, sex, and ethnicity of the principal owners of the business.''
This statutory provision does not explicitly call for the collection of
disaggregated data on the race and ethnicity of principal owners. Given
its concern about commencing a long-term data collection regime by
asking for potentially complex and costly data points, the Bureau seeks
comment on whether it should revise the rule's data collection
requirements to require collection only of aggregate ethnicity and race
categories.
As a result, and consistent with its reconsideration of
discretionary data points, the Bureau also seeks specific comment on
what utility there might be for carrying out the purposes of section
1071 in requiring the collection of disaggregated categories of
ethnicity and race, in addition to the aggregate categories. The Bureau
also seeks comment on the costs and burdens for financial institutions
in requiring the collection of these disaggregated categories of
ethnicity and race.
Defending Women E.O.
LGBTQI+-ownership. Current Sec. 1002.107(a)(18) requires financial
institutions to inquire whether a small business applicant for credit
is a minority-owned, women-owned, and/or LGBTQI+-owned business. The
Bureau explained that, based on limited information available, it
believed that LGBTQI+-owned businesses may experience particular
challenges accessing small business credit, and used its discretionary
authority under 15 U.S.C. 1691c-2(e)(2)(H) to require financial
institutions to request information about whether an applicant is a
LGBTQI+-owned business. In the time since the 2023 rule, the Bureau has
heard repeated concerns from stakeholders, as well as members of
Congress and the general public, that this question in particular is an
invasion of privacy and risks damaging the relationship between small
businesses and their lenders, particularly in smaller lending markets.
The Bureau now believes that the sensitivities involved in this
inquiry, which the 2023 rule did not address, exceed any utility this
data point might provide, and that it adds to the overall complexity of
a lengthy data collection.\58\
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\58\ The Bureau also notes that it has withdrawn its 2023
interpretive rule concerning LGBTQI+ discrimination under ECOA. 86
FR 14363 (Mar. 16, 2021) (clarifying that the prohibition against
sex discrimination in ECOA and Regulation B encompasses sexual
orientation and gender identity discrimination); 90 FR 20084 (May
12, 2025) (withdrawing the 2021 interpretive rule). That rule sought
to extend to ECOA the Court's holding in Bostock, which found title
VII's prohibition against sex discrimination includes discrimination
based on sexual orientation and gender identity. Bostock v. Clayton
Cnty., 590 U.S. 644 (2020). The Court has since declined to
expressly extend the holding of Bostock beyond the title VII
context. United States v. Skrmetti, 605 U.S. __(2025).
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In addition, the President issued the Defending Women E.O. (E.O.
14168) on January 30, 2025, which directs Federal agencies seeking
information not to discuss gender identity and to refer to sex using a
binary of male/female. Consistent with this E.O. and the feedback the
Bureau received from stakeholders and members of Congress and the
general public described above, the Bureau is proposing to make certain
conforming changes to the rule and remove or rescind provisions in the
current rule that do not comply with the order. These changes generally
would include (1) removing references to and questions about
``LGBTQI+''-owned business status, (2) requiring financial institutions
to inquire about a principal owner's sex, rather than sex/gender, and
(3) providing that the sex of the principal owners be selected from a
static binary response option of male/female, rather than a free-form
text field.
Specifically, the proposed changes would include removing the
definition related to LGBTQI+-owned business status in Sec.
1002.102(k) and (l) and removing references to LGBTQI+-owned business
status in Sec. 1002.107(a)(18) and (19) and associated commentary, and
revising how principal owners' sex is to be collected in commentary
accompanying Sec. 1002.107(a)(19). The proposed changes would also
include removing references to LGBTQI+-owned business status in
Regulation B, subpart A, Sec. 1002.5(a)(4) and revising commentary
accompanying Sec. 1002.5(a)(2). The Bureau is also proposing to make
conforming changes elsewhere throughout the regulatory text and
associated commentary, as well as the sample form in appendix E.
The Bureau seeks comment on these proposed changes.
Sex/gender. Current Sec. 1002.107(a)(19) requires financial
institutions to ask a small business applicant to provide its principal
owners' ethnicity, race and sex. Associated commentary further explains
how financial institutions are to make these requests. Commentary to
current Sec. 1002.107(a)(19) requires financial institutions, when
requesting principal owners' sex, to use the term ``sex/gender'' and to
give applicants a free-form text field to provide a response.
Commentary accompanying current Sec. 1002.107(a)(19) requires
financial institutions, when requesting principal owners' sex, to use
the term ``sex/gender'' and to give applicants a free-form text field
to provide a response. In the 2023 rule, the Bureau explained its
belief that this approach would allow applicants to self-identify as
they see fit. Commenters had contended, however, that the free-form
text approach would inhibit data analysis.
The Bureau now agrees with commenters who had asserted that,
particularly in the context of a data collection rule, a free-form text
field would inhibit robust data analysis, contrary to the purposes of
the rule. The Bureau also now believes, based on feedback from
stakeholders of all kinds, that a free-form text field would likely
result in poor data quality, given the variety of possible responses to
the sex question even for a single type of answer.\59\ The potential
for confusion is
[[Page 50964]]
exacerbated by the lack of clarifying instructions. The Bureau now
believes that the most appropriate way to collect data on the sex of a
principal owner is to ask the straightforward question of whether the
owner is male or female.
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\59\ Responses intended to indicate ``female'' sex could include
``female,'' ``woman,'' ``feminine,'' ``mujer,'' ``F,'' ``W,'' and
even ``M.'' Responses intended to indicate ``male'' could include
``man,'' ``male,'' ``hombre,'' ``guy,'' ``M,'' ``m,'' ``H,'' etc.
Free-form text responses may also result in non-serious responses.
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Additionally, this proposed change comports with the Defending
Women order described above. Specifically, the changes consistent with
E.O. 14168 would include revising how principal owners' sex is to be
collected in commentary accompanying Sec. 1002.107(a)(19). The Bureau
is also proposing to make conforming changes elsewhere throughout the
regulatory text and associated commentary, as well as the sample form
in appendix E.
The Bureau solicits comment on these proposed changes.
Applicant's Right To Refuse To Provide Demographic Data
Current Sec. 1002.107(a)(18) requires covered financial
institutions to seek information from applicants about their women-
owned, minority-owned, and LGBTQI+-owned business status and Sec.
1002.107(a)(19) requires covered financial institutions to seek
information from applicants about the ethnicity, race, and sex of the
principal owners of the applicant business. Those provisions and
associated commentary also include discussions of the statutorily
provided right of an applicant to refuse to provide this
information.\60\
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\60\ 15 U.S.C. 1691c-2(c).
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The Bureau is proposing to revise the applicant right to refuse
discussions in Sec. 1002.107(a)(18) and (19), as well as the related
commentary. In addition, the Bureau is proposing corresponding changes
to the sample demographic data collection form in appendix E.
Currently, the regulatory text of Sec. 1002.107(a)(18) and (19)
provides that covered financial institutions must inform applicants
that the financial institution cannot discriminate against the
applicant based on the demographic information provided pursuant to the
rule or on whether the applicant invokes the right to refuse to provide
the information. Existing comments 107(a)(18)-1 and 107(a)(19)-1 state
that a financial institution must permit an applicant to refuse (i.e.,
decline) to answer the financial institution's inquiries regarding
business status and ethnicity, race, and sex, and must inform the
applicant that it is not required to provide the information. The
Bureau is proposing to add the requirement to inform applicants of
their right to refuse to the regulatory text of Sec. 1002.107(a)(18)
and (19), for clarity.
The Bureau is also proposing changes to the sample form in appendix
E to further emphasize the right to refuse.
The Bureau seeks comment on these proposed changes.
107(c) Time and Manner of Collection
Anti-Discouragement and Related Provisions
In the 2023 rule, the Bureau explained that it was adopting the
provisions in Sec. 1002.107(c) in an attempt to provide a balance
between allowing institutions flexibility in how they collect data and
ensuring that institutions do not discourage or otherwise interfere
with applicants' providing their data. Existing Sec. 1002.107(c)
requires a covered financial institution to (1) not discourage an
applicant from responding to requests for applicant-provided data under
final Sec. 1002.107(a) and to otherwise maintain procedures to collect
such data at a time and in a manner that are reasonably designed to
obtain a response; (2) identify certain minimum components when
collecting data directly from the applicant that must be included
within a financial institution's procedures to ensure they are
reasonably designed to obtain a response; (3) maintain procedures to
identify and respond to indicia that it may be discouraging applicants
from responding to requests for applicant-provided data, including low
response rates for applicant-provided data; as well as (4) provide that
low response rates for applicant-provided data may indicate that a
financial institution is discouraging applicants from responding to
requests for applicant-provided data or otherwise failing to maintain
procedures to collect applicant-provided data that are reasonably
designed to obtain a response.
The CFPB proposes to remove certain references to the
discouragement prohibition in Sec. 1002.107(c)(1) and (c)(2)(iii), as
well as related commentary that the Bureau believes are redundant and
add unnecessary regulatory complexity. It also proposes to remove Sec.
1002.107(c)(3) and (c)(4) and related commentary; these provisions
detail requirements to monitor for indicia of discouragement, such as
low response rates from applicants, and explicitly provide that low
response rates may be indicia of discouragement. Further, the CFPB
proposes to revise commentary to Sec. 1002.107(c)(2) which established
specific restrictions on the time and manner of data collection that
are similar to the anti-discouragement provisions.
Section 1071, as implemented by Regulation B, subpart B, creates
binding obligations for covered financial institutions to ask small
business applicants for credit for their demographic information, but
it includes no requirements regarding how institutions must ask for the
information.\61\ By contrast, the 2023 final rule imposed numerous
obligations in Sec. 1002.107(c) on the basis of theoretical concerns
that institutions would seek to evade compliance by discouraging
applicants from providing their information or otherwise interfering
with applicants providing their data. It did not provide any evidence
in support of its concerns, such as evidence from past experience with
HMDA or other similar situations. In addition, the Bureau now believes
that comment 107(c)(2)-2.iii.A, which discusses financial institution
statements that would violate the anti-discouragement provision, raises
serious First Amendment concerns.
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\61\ 90 FR 20084, 20086 (May 12, 2025) (withdrawing the
Statement on Enforcement and Supervisory Practices Relating to the
Small Business Lending Rule Under the ECOA and Regulation B).
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The 2023 final rule also describes in commentary several
obligations related to anti-discouragement, such as the requirements
that financial institutions maximize the collection of data, request
applicant-provided data before a final credit decision is made, and
ensure that applicants do not overlook requests for data.
The Bureau's belief that the anti-discouragement and other related
provisions are unnecessary is also bolstered by feedback it has
received from a number of stakeholders regarding difficulties with
implementing these provisions, particularly with respect to the
discussion in comment 107(c)(4)-1 as to comparison of response rates
for demographic questions across similar financial institutions.
Further, the provisions in Sec. 1002.107(c) that would remain after
these proposed revisions still impose affirmative obligations to
maintain procedures reasonably designed to obtain a response from
credit applicants.
Given the existence of these provisions, and in light of E.O.s
14192 and 14219 that require the CFPB to seek ways to increase
efficiency in regulations, the CFPB now reconsiders existing Sec.
1002.107(c) and preliminarily finds that its various prohibitions on
discouragement are redundant and unnecessary. They are redundant in
that
[[Page 50965]]
they appear to create obligations to comply with other existing
obligations. They are unnecessary because the obligations to collect
data and to maintain systems reasonably designed to elicit responses
are already subject to the enforcement provisions of Sec. 1002.112 in
the event of non-compliance. Further, comments received in response to
the 2025 interim final rule from a trade association suggested that
these provisions were vague and did not make clear what would and would
not constitute discouragement. All of this would add unnecessary
regulatory complexity for lenders.
The CFPB observes that the other requirements in the current
commentary to Sec. 1002.107(c)(2)--concerning maximizing the
collection of data, requesting applicant-provided data before a credit
decision is made, and ensuring that applicants not overlook requests
for data--should not have been framed as binding obligations because
they are unnecessary obligations beyond those already established in
Sec. 1002.107(c). However, unlike the anti-discouragement provisions,
these provisions identify practices likely to help covered financial
institutions comply with the 2023 final rule. The CFPB proposes
revising these provisions to provide guidance to financial institutions
rather than contributing unnecessary regulatory complexity in the form
of additional obligations. The CFPB believes that providing this
flexibility will advance the statutory purposes of the rule by helping
financial institutions collect better quality data without requiring
them to follow rigid practices that may in some instances impede rather
than encourage data collection. The CFPB further believes that making
these practices guiding principles, rather than requirements, better
conforms with the existing regulatory text of Sec. 1002.107(c), which
requires covered lenders to ``maintain procedures to collect such data
at a time and in a manner that are reasonably designed to obtain a
response'' (emphasis added).
For purposes of streamlining and simplifying the rule by removing
unnecessary regulations, as discussed above, the Bureau proposes to
remove provisions regarding or discussing a prohibition on the
discouragement of applicants from providing data required under the
rule, and proposes revising other provisions concerning the time and
manner of collection to provide guidance rather than additional
obligations.
The Bureau seeks comment on these proposed changes.
F. Section 1002.114--Effective Date, Compliance Date, and Special
Transitional Rules
114(b) Compliance Date
The rule's compliance dates, as most recently amended by the 2025
compliance dates final rule, are set forth in current Sec.
1002.114(b). That section looks to a financial institution's volume of
covered credit transactions for small businesses to determine which of
three compliance dates (currently July 1, 2026, January 1, 2027, and
October 1, 2027) are applicable to a financial institution.
The CFPB proposes amending Sec. 1002.114(b) to eliminate the
system of tiered compliance dates in favor of creating a single
compliance date. Mirroring the change to the rule's origination
threshold set forth in proposed Sec. 1002.105(b), proposed Sec.
1002.114(b) would require that all covered financial institutions that
originated at least 1,000 covered credit transactions for small
businesses in each of calendar years 2026 and 2027 begin to comply with
the rule starting on January 1, 2028. The CFPB proposes making
corresponding updates throughout the commentary accompanying Sec.
1002.114(b) and (c), which would provide additional guidance and
examples regarding the compliance date.
The CFPB preliminarily believes that the extension of the single
compliance date to January 1, 2028, is necessary and reasonable for
several independent reasons. Those covered financial institutions that
would reasonably expect to be above the new 1,000 origination threshold
will need additional time to adjust their compliance systems to any
changes to the rule the CFPB adopts after considering the comments
submitted on this NPRM. The proposed revisions would not only reduce
certain reporting requirements, such as the proposed elimination of
many of the discretionary data points, but would also change existing
requirements concerning statutorily required demographic data points,
consistent with the Defending Women E.O. Such changes may require that
financial institutions that may have already prepared to comply with
the 2023 final rule to change forms, customer interfaces, or other
compliance software or regulatory processes.
Further time would also be necessary for other institutions to
determine whether they are covered at all under the rule, given the
proposed modification of the threshold for covered financial
institutions from 100 to 1,000 originations, as well as other proposed
changes that would result in fewer transactions being counted toward
the 1,000 origination threshold (such as the proposed removal of
certain categories of credit transactions from Sec. 1002.104(b), from
the definitions of covered credit transaction, and the change to the
definition of small business in Sec. 1002.106).
The CFPB likewise believes it would be appropriate to adopt a
single compliance date, to begin on January 1, 2028, that is applicable
to all covered financial institutions. The need for a tiered compliance
structure is diminished by the length of time that has passed since the
adoption of the 2023 final rule as well as fewer covered financial
institutions as a result of changes proposed to Sec. Sec. 1002.104(b),
1002.105(b), and 1002.106. The CFPB has also heard feedback from
stakeholders regarding difficulties for financial institutions in
complying with the rule mid-year, which would be resolved by the
proposed revisions to Sec. 1002.114.
Finally, the CFPB believes that its proposed compliance date
resolves any lingering concerns arising from previous compliance date
extensions. As the CFPB explained in its 2025 interim final rule and
2025 compliance date final rule, those rules were necessary to avoid a
subset of covered financial institutions remaining obligated to come
into compliance with the 2023 rule, even though many of these
institutions would be too small to qualify as covered financial
institutions under this proposed rule, if finalized, meaning that they
would likely incur significant compliance costs for only a single
year's submission of data. Furthermore, this costly single-year
submission of data--with costs inequitably imposed only on covered
financial institutions that happened not to be plaintiffs or
intervenors in litigation--would likely provide little benefit. For
example, the data would be submitted in accordance with a different set
of data points under Sec. 1002.107(a), which could have caused
analytical concerns in comparison with data submitted pursuant to this
proposed rule, if finalized. Additionally, prior to releasing any data
from the single-year submission, the CFPB would need to conduct an
analysis under Sec. 1002.110(a) to determine if deletion or
modification of the data would advance a privacy interest, and due to
the smaller size of the single-year data set, it is likely that more
data would need to be deleted or modified, limiting its utility.
Finally, if covered financial institutions were not given additional
time to comply with the changes
[[Page 50966]]
proposed here, the Bureau is concerned that credit access and data
quality might be affected in a manner that would not advance the
purposes of the statute.
The CFPB seeks comment on these proposed changes. It also seeks
comment on whether it would be appropriate to finalize this compliance
date amendment in advance of finalizing the proposal's other changes,
so that institutions currently covered by the 2023 rule could have
earlier certainty as to the timing of their obligations, if any.
114(c) Special Transition Rules
In the 2023 final rule, financial institutions were instructed to
determine their compliance tier based on their originations in 2022 and
2023. Subsequent changes to the rule added the time periods of 2023 and
2024, or 2024 and 2025, that financial institutions could choose to use
instead. These alternatives are set out in existing Sec.
1002.114(c)(3) and related commentary.
The CFPB is proposing revising Sec. 1002.114(c)(3) and related
commentary to require a financial institution to count its originations
of covered credit transactions in each of calendar years 2026 and 2027
to determine whether it must comply with the rule on the proposed
compliance date of January 1, 2028. This proposed change would simplify
Sec. 1002.114(c) and better align it with the proposed revisions to
Sec. 1002.114(b).
The CFPB believes that the range of options provided by current
Sec. 1002.114(c), intended to provide flexibility to potentially
covered financial institutions, is no longer appropriate for a single
compliance date with a single originations threshold. Further, proposed
Sec. 1002.114(c) would use calendar years closer to the new compliance
date and would be a fairer time period to count originations. The
compliance date in proposed Sec. 1002.114(b) of January 1, 2028, would
be nearly five years removed from some of the two-year time periods
used to determine when a covered financial institution must begin to
collect data. Originations in 2026 and 2027 would be controlling in any
event; if a financial institution would be covered by the rule based on
its originations in 2022 and 2023, but fell below the threshold based
on 2026 and 2027, it would not be a covered financial institution for
2028. The CFPB thus believes that referring to the number of
originations during calendar years 2026 and 2027 would be more
appropriate and relevant to determining whether a financial institution
must comply with the rule starting in January 2028.
The CFPB seeks comment on this proposed change.
IV. CFPA Section 1022(b) Analysis
In developing the proposed 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).
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 the Dodd-Frank Act, which was enacted ``[t]o promote the
financial stability of the United States by improving accountability
and transparency in the financial system,'' Congress directed the
Bureau to adopt regulations governing the collection of small business
lending data. Under section 1071 of that Act, covered financial
institutions must compile, maintain, and submit certain specified data
points regarding applications for credit for small businesses, with
particular attention to women-owned and minority-owned small
businesses, along with ``any additional data that the Bureau determines
would aid in fulfilling the purposes of this section.'' Under the 2023
final rule, covered financial institutions are required to collect and
report the following data points: (1) a unique identifier, (2)
application date, (3) application method, (4) application recipient,
(5) credit type, (6) credit purpose, (7) amount applied for, (8) amount
approved or originated, (9) action taken, (10) action taken date, (11)
denial reasons, (12) pricing information, (13) census tract, (14) gross
annual revenue, (15) NAICS code, (16) number of workers, (17) time in
business, (18) minority-owned, women-owned, and LGBTQI+-owned business
status, (19) ethnicity, race, and sex of principal owners, and (20) the
number of principal owners.
Under the 2023 final rule, financial institutions are required to
report data on small business credit applications if they originated at
least 100 covered credit transactions in each of the two preceding
calendar years. Loans, lines of credit, credit cards, and merchant cash
advances (including such credit transactions for agricultural purposes)
all fall within the transactional scope of the 2023 final rule, with no
limitations on loan amount. The Bureau excluded trade credit,
transactions that are reportable under HMDA, insurance premium
financing, public utilities credit, securities credit, and incidental
credit. Factoring, leases, and consumer-designated credit used for
business or agricultural purposes are also not covered credit
transactions. For purposes of the 2023 final rule, a business is a
small business if its gross annual revenue for its preceding fiscal
year is $5 million or less. Finally, the 2023 final rule, as
subsequently amended, establishes several compliance dates for
financial institutions based on three origination size thresholds.
This proposed rule reconsiders certain provisions of the 2023 final
rule. Under this proposed rule, covered financial institutions would no
longer be required to collect and report the following data points:
application method, application recipient, denial reasons, pricing
information, number of workers, and LGBTQI+-owned business status. This
proposed rule would make adjustments to some of the other data points
(including minority-owned business status and ethnicity, race, and sex
of principal owners) as well as the timing and methods to be used in
the collection of data.
In addition, under this proposed rule, a financial institution
would be required to report data if the financial institution
originated at least 1,000 covered credit transactions in each of the
two preceding calendar years, and one category of financial
institutions (FCS lenders) would be excluded from coverage. The CFPB is
also proposing to exclude merchant cash advances, credit transactions
for agricultural purposes, and small dollar loans of $1,000 or less
from the transactional scope of the rule. For the purposes of the
proposed rule, a business would be a small business under this proposed
rule if its gross annual revenue for its preceding fiscal year is $1
million or less. Finally, the proposed rule would change the compliance
date provision to require a single compliance date for covered
financial institutions.
A. Statement of Need
Congress directed the Bureau to adopt regulations governing the
collection of small business lending data. Specifically, section 1071
of the Dodd-Frank Act amended ECOA to require financial institutions to
compile, maintain, and submit to the Bureau certain data on
applications for credit for small businesses, particularly
[[Page 50967]]
women-owned and minority-owned small businesses. Congress enacted
section 1071 for the purpose of facilitating enforcement of fair
lending laws and enabling communities, governmental entities, and
creditors to identify business and community development needs and
opportunities of women-owned, minority-owned, and small businesses. The
Bureau is issuing this proposed rule to reconsider portions of the 2023
final rule in order to more effectively fulfill its statutory purposes.
As discussed in parts I and III, the Bureau believes, in
retrospect, that its approach in the 2023 final rule was not conducive
to fulfilling the long-term statutory purposes of section 1071 of the
Dodd-Frank Act. The Bureau now believes that a more incremental
approach would limit, as much as possible, any disturbance to the
provision of credit to small entities. The Bureau expects that a more
gradual approach to adding data points or expanding coverage, if
needed, would more effectively serve both the fair lending and
community development purposes of the rule in the long run.
In particular, the Bureau believes it should focus on core lending
products, core lending providers, and core data points, rather than
take the more expansive approach of its 2023 final rule. To accomplish
this, the Bureau proposes multiple changes from the 2023 final rule.
Among the most consequential changes, the Bureau proposes to exempt
several categories of credit from the definition of covered
transactions, including sales-based financing, loans for agricultural
purposes, and small dollar loans. The Bureau now believes that
application data collected on these types of transactions would be of
lower quality while imposing collection requirements on institutions
that issue them. The Bureau also proposes to raise the number of loans
that trigger reporting requirement to 1,000 and exempt FCS lenders from
coverage of the rule to focus on core providers in the small business
lending space. The Bureau proposes to change the definition of ``small
business'' in current Sec. 1002.106(b) from $5 million or less to $1
million or less in annual gross revenue to ensure that data is
collected on truly small businesses, rather than collect additional
data on businesses that could be considered large in some contexts.
Lastly the rule removes several data points from the collection,
relative to the 2023 final rule, including pricing data, application
method, application recipient, denial reasons, pricing and number of
workers to limit the initial compliance costs for collecting and
reporting data in compliance with section 1071.
The Bureau believes these changes help further the statutory
purposes, for facilitating fair lending enforcement and community
development, in several ways. By reducing the initial burden of the
data collection on some institutions and removing the collection
requirement from others, the Bureau believes that it will reduce
disruption in the small business lending market compared to the more
expansive 2023 final rule requirements. Disruption in the small
business lending market could run counter to the community development
purposes of the final rule. By focusing the data collection on core
providers, transactions, and data points the Bureau expects the data
collected under this proposed rule will be of higher quality and will
be more useful for fair lending enforcement and community development.
B. Baseline for the Consideration of Costs and Benefits
In evaluating the potential benefits, costs, and impacts of this
proposed rule, the Bureau takes as a baseline that all financial
institutions covered under the 2023 final rule are in appropriate
compliance with that rule, as codified in subpart B of Regulation B and
amended by the 2024 interim final rule, the 2025 interim final rule,
and the 2025 compliance date final rule.\62\ Under this baseline, the
Bureau also assumes that institutions are complying with other
regulations that they are currently subject to, including reporting
data under HMDA, CRA, and any State commercial financing disclosure
laws.\63\ The Bureau believes that this baseline provides the public
with the most reasonable basis for analyzing the benefits and costs of
this proposed rule. The Bureau seeks comment on the advantages and
disadvantages of considering this baseline.
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\62\ For example, many financial institutions would not be
required to comply with the 2023 final rule as amended until 2027.
The Bureau does not assume that such institutions would already be
in compliance with the 2023 final rule. Instead, the Bureau assumes
that some institutions have already spent some resources to
implement the rule, as discussed more in part IV.E.1.
\63\ See, e.g., N.Y.S. 898 (signed Jan. 6, 2021) (amending S.
5470-B), <a href="https://legislation.nysenate.gov/pdf/bills/2021/s898">https://legislation.nysenate.gov/pdf/bills/2021/s898</a>; Cal.
S.B. 1235 (approved Sept. 30, 2018), <a href="https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180SB1235">https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180SB1235</a>; Va. H. 1027 (approved
Apr. 11, 2022), <a href="https://lis.virginia.gov/cgi-bin/legp604.exe?221+ful+CHAP0516">https://lis.virginia.gov/cgi-bin/legp604.exe?221+ful+CHAP0516</a>; Utah S.B. 183 (signed Mar. 24, 2022),
https://le.utah.gov/~2022/bills/static/SB0183.html.
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C. Basic Approach of the Bureau's Consideration of Benefits and Costs
and Data Limitations
Pursuant to section 1022(b)(2)(A) of the Dodd-Frank Act,\64\ in
prescribing a rule under the Federal consumer financial laws (which
include ECOA and title X of the Dodd-Frank Act), the Bureau is required
to consider the potential benefits and costs to ``consumers'' and
``covered persons,'' including the potential reduction of access by
consumers to consumer financial products or services resulting from
such rule, and the impact of final rules on covered persons as
described under section 1026 of the Dodd-Frank Act \65\ (i.e.,
depository institutions and credit unions with $10 billion or less in
total assets), and the impact on consumers in rural areas.
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\64\ 12 U.S.C. 5512(b)(2)(A).
\65\ 12 U.S.C. 5516.
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The Dodd-Frank Act defines the term ``consumer'' as an individual
or someone acting on behalf of an individual. It defines a ``covered
person'' as one who engages in offering or providing a ``consumer
financial product or service,'' which means a financial product or
service that is provided to consumers primarily for ``personal, family,
or household purposes.'' \66\ In rulemakings implementing section 1071,
however, the only parties directly affected by the rule are small
businesses (rather than individual consumers) and the financial
institutions from which they seek credit (which may or may not be
covered persons). Accordingly, a section 1022(b)(2)(A) analysis that
considers only the costs and benefits to individual consumers and to
covered persons would not meaningfully capture the costs and benefits
of the rule.
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\66\ 12 U.S.C. 5481(4) through (6).
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Below, the Bureau conducts the statutorily required analysis with
respect to the proposed rule's effects on consumers and covered
persons. Additionally, consistent with the approach in the 2023 final
rule, the Bureau is electing to conduct this same analysis with respect
to small businesses and the financial institutions that would be
required to compile, maintain, and submit data under the proposed rule.
This analysis relies on data that the Bureau has obtained from
industry, other regulatory agencies, and publicly available sources.
However, as discussed further below, the available data limit the
Bureau's ability to quantify the potential costs, benefits, and impacts
of the proposed rule.
The Bureau seeks comments on the basic approach discussed below and
any
[[Page 50968]]
additional data sources that may be used to improve this approach.
1. Analysis With Respect to Consumers and Covered Persons
The 2023 final rule implemented a data collection regime in which
certain covered financial institutions must compile, maintain, and
submit data with respect to applications for credit for small
businesses. This proposed rule amends that implementation. The proposed
rule would not directly impact consumers, including consumers in rural
areas, as those terms are defined by the Dodd-Frank Act. However, some
consumers may be impacted in their separate capacity as sole owners of
small businesses covered by the proposed rule. Some covered persons,
including some depository institutions or credit unions with $10
billion or less in total assets, would be affected under the proposed
rule not in their capacity as covered persons (i.e., as offerors or
providers of consumer financial products or services) but in their
separate capacity as financial institutions that offer small business
credit covered by the proposed rule. The costs, benefits, and impact of
the proposed rule on those entities are discussed below.
2. Benefits to Impacted Financial Institutions
The proposed rule would modify the 2023 final rule with respect to
which financial institutions and transactions are covered, and which
data points are required to be collected and reported. Many financial
institutions that would not be covered by the proposed rule will still
be impacted by the proposed rule because they would have been covered
under the 2023 final rule (as amended). The Bureau analyzes the impacts
of the proposed rule relative to the baseline (1) on covered
institutions and (2) on institutions that would no longer be covered
and calls the combined group of institutions ``impacted financial
institutions.'' The main expected benefit of the proposed rule to
impacted financial institutions comes in the form of cost savings. The
Bureau calculates these cost savings by estimating the change in
compliance costs between the proposed rule and the baseline.
In order to precisely quantify the cost savings for impacted
financial institutions, the Bureau would need representative data and
information on the operational costs that financial institutions would
incur to gather and report 1071 data, on one-time costs for financial
institutions to update or create reporting infrastructure to implement
requirements of the proposed rule, and on the level of complexity of
financial institutions' business models and compliance systems.
Furthermore, the Bureau would need this information under both the
baseline and the proposed rule. Currently, the Bureau does not believe
that data on section 1071 reporting costs with this level of
granularity are systematically available from any source. The Bureau
has made reasonable efforts to gather data on section 1071 reporting
costs and primarily uses the same methodology that it used to analyze
the 2023 final rule, unless otherwise noted. The Bureau continues to
believe that its analysis here and in the 2023 final rule constitutes
the most comprehensive assessment to date of the compliance costs
associated with implementing section 1071 reporting by financial
institutions and provides the most accurate estimates of costs given
available information. However, the Bureau recognizes that these
estimates may not fully quantify the costs to each covered financial
institution, especially given the wide variation of section 1071
reporting costs among financial institutions.
The Bureau categorizes costs required to comply with the baseline
and the proposed rule into ``one-time'' and ``ongoing'' costs.
Similarly, the Bureau reports cost savings in these terms. ``One-time''
costs refer to expenses that the financial institution incur initially
and only once to implement changes required in order to comply with the
requirements of this rule. ``Ongoing'' costs are expenses incurred as a
result of the ongoing reporting requirements of the rule, which the
Bureau considers on an annualized basis. In considering the costs and
impacts of the 2023 final rule, the Bureau has engaged in a series of
efforts to estimate the cost of compliance by covered entities. The
Bureau conducted a One-Time Cost Survey, discussed in more detail in
part IX.E.1 of the 2023 final rule,\67\ to learn about the one-time
implementation costs associated with implementing section 1071 and
adapted ongoing cost calculations from previous rulemaking efforts. The
Bureau evaluated the one-time costs of implementing the procedures
necessary and the ongoing costs of annually reporting under the
proposed rule in part IV.F.1 below. The Bureau recognizes that costs
vary by institution due to many factors, such as size, operational
structure, and product complexity, and that this variance exists on a
continuum that is impossible to fully represent. In order to conduct a
consideration of impacts that is both practical and meaningful in light
of these challenges, the Bureau has chosen an approach that focuses on
three representative types of financial institutions. For each type,
the Bureau has produced reasonable estimates of the costs of compliance
given the limitations of the available data. Part IV.E.1 below provides
additional details on this approach.
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\67\ See 88 FR 35150, 35497 (May 31, 2023).
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The Bureau understands that some financial institutions that are
covered under the baseline have started implementing the 2023 final
rule. Institutions that would be no longer covered as a result of the
proposed rule may have already incurred some one-time costs to
implement the baseline that would not have been necessary under this
proposed rule. The Bureau does not count these expenditures as costs of
the proposed rule because those costs have already been incurred and
are discussed in more detail in part IV.E.1. Instead, the Bureau
accounts for these expenditures through reductions in cost savings. If
an institution becomes no longer covered as a result of the proposed
rule, it will no longer be able to recoup all one-time implementation
costs, as discussed in part IV.E.1.
3. Benefits to Small Businesses
Consistent with the 2023 final rule, the Bureau elects to estimate
the benefits and cost savings to small businesses in addition to cost
and benefit savings to impacted financial institutions. As with
financial institutions, the Bureau expects that the main benefits of
the proposed rule to small businesses would arise as a result of cost
savings. The Bureau expects the direct cost savings of the proposed
rule to small businesses would be negligible. However, the Bureau
expects that there could be indirect cost savings of the proposed rule
to small businesses if financial institutions pass on their cost
savings. Therefore, the Bureau focuses its analysis on whether and how
the Bureau expects impacted financial institutions to pass on the cost
savings from the proposed rule to small businesses and any possible
effects on the availability or terms of small business credit. The
Bureau relies on economic theory to understand the potential for cost
savings of financial institutions to be passed on to small businesses.
4. Costs to Small Businesses and Impacted Financial Institutions
The costs to small businesses and to impacted financial
institutions associated with the proposed rule will primarily come from
a decrease in the benefits associated with the 2023 final
[[Page 50969]]
rule. Quantifying benefits to small businesses presents substantial
challenges. As discussed above, Congress enacted section 1071 for the
purpose of facilitating enforcement of fair lending laws and enabling
communities, governmental entities, and creditors to identify business
and community development needs and opportunities of women-owned,
minority-owned, and small businesses. The Bureau is unable to quantify
any of these benefits, both because the Bureau does not have the data
to do so and because the Bureau is not able to assess how effective the
2023 final rule would be in achieving those benefits. The same
difficultly holds for the change in benefits associated with the
proposed rule. As discussed further below, as a data reporting rule,
most provisions of the baseline and the proposed rule will benefit
small businesses in indirect ways, rather than directly.
Similar issues arise in attempting to quantify the decrease in
benefits to impacted financial institutions. Certain benefits to
impacted financial institutions are difficult to quantify. For example,
the Bureau believes that the data collected under both the baseline and
this proposed rule will reduce the compliance burden of fair lending
reviews for lower risk financial institutions that are likely to be in
compliance with ECOA by reducing the ``false positive'' rates during
fair lending prioritization by regulators. However, the Bureau does not
have the information to quantify such benefits.
In light of these data limitations, the discussion below generally
provides a qualitative consideration of the reduction of benefits under
the proposed rule relative to the baseline. General economic
principles, together with the limited data available, provide insight
into the loss of benefits. Where possible, the Bureau makes
quantitative estimates based on these principles and the data that are
available. Quantifying these benefits is difficult because the size of
each effect cannot be known in advance. Given the number of small
business credit transactions and the size of the small business credit
market, however, small changes in behavior can have substantial
aggregate effects.
In addition, financial institutions that remain covered under the
proposed rule may incur adjustment costs. This would occur when
institutions have already made efforts to implement the provisions of
the 2023 final rule and would incur additional costs to modify their
existing implementation to comply with this proposed rule. If a
financial institution has not begun to implement the 2023 final rule,
then it would not incur adjustment costs.
D. Coverage of the Proposed Rule
The proposed rule provides that financial institutions (both
depository and nondepository) that meet all the other criteria for a
``financial institution'' in proposed Sec. 1002.105(a) would only be
required to collect and report section 1071 data if they originated at
least 1,000 covered credit transactions in each of the two preceding
calendar years. In addition, under the proposed rule, FCS lenders would
not be required to collect and report section 1071 data, even if they
meet this proposed new threshold.
As discussed above, market-wide data on small business lending are
currently limited. The Bureau is unaware of any comprehensive data
available on small business originations for all financial
institutions, which are needed to precisely identify all institutions
to be covered by the proposed rule or the 2023 final rule. To estimate
the change in coverage as a result of the proposed rule, the Bureau
uses publicly available data for financial institutions divided into
two groups: depository (i.e., banks, savings associations, and credit
unions) and nondepository institutions. The Bureau employs the
methodology used in the 2023 final rule to estimate the change in
coverage as a result of the proposed rule and relies on updated data.
With respect to depository institutions, the Bureau relies on
National Credit Union Administration (NCUA) Call Reports to estimate
coverage for credit unions, including for those that are not federally
insured, and Federal Financial Institutions Examination Council (FFIEC)
Call Reports and the CRA data to estimate coverage for banks and
savings associations. For the purposes of the analysis in this part
IV.D, the Bureau estimates the number of depository institutions that
would have been required to report small business lending data in 2023,
based on the estimated number of originations of covered products for
each institution in 2022 and 2023.\68\ The Bureau accounts for mergers
and acquisitions in 2022 and 2023 by assuming that any depository
institutions that merged in those years report as one institution.
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\68\ In the proposed rule, an institution would be required to
report for a given year if it originated at least 1,000 covered
originations in each of the preceding two years. For the purposes of
estimating the impacts of the proposed rule, the Bureau assumes that
a financial institution would be required to report information from
the year 2023 if the institution made at least 1,000 loans in 2022
and 2023. The Bureau makes this simplifying assumption for two
reasons. First, the Bureau does not rely on data from 2020 or 2021
to avoid the years where small business lending would have been most
affected by the COVID-19 pandemic. Second, the Bureau requires CRA
data to estimate coverage and those data are only available through
2023.
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The NCUA Call Report captures the number and dollar value of
originations on all loans over $50,000 to members for commercial
purposes, regardless of any indicator about the borrowing business's
size. For the purposes of estimating the impacts of the proposed rule,
the Bureau uses the annual number of originated commercial loans to
members reported by credit unions as a proxy for the annual number of
originated covered credit transactions under the rule.\69\ These are
the best data available to the Bureau for estimating the number of
credit unions that may be covered by the proposed rule. However, the
Bureau acknowledges that the true number of covered credit unions may
be different than what is presented here. For example, this proxy would
overestimate the number of credit unions that will be covered if some
commercial loans to members are not covered because the member is
taking out a loan for a business that is not small under the definition
of a small business in the proposed rule. Alternatively, this proxy
would underestimate the number of credit unions covered by the proposed
rule if credit unions originate a substantial number of covered credit
transactions with origination values under $50,000 that are not counted
in the data.
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\69\ For this analysis, the Bureau includes all types of
commercial loans to members except construction and development
loans, loans secured by multifamily residential property, loans
secured by farmland, and loans to finance agricultural production
and other loans to farmers. This includes loans secured by owner-
occupied, non-farm, non-residential property; loans secured by non-
owner occupied, non-farm, non-residential property; commercial and
industrial loans; unsecured commercial loans; and unsecured
revolving lines of credit for commercial purposes.
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[[Page 50970]]
The FFIEC Call Report captures banks' and savings associations'
outstanding number and dollar amount of small loans to businesses
(i.e., loans originated under $1 million to businesses of any size;
small loans to farms are those originated under $500,000). The CRA
requires banks and savings associations with assets over a specified
threshold ($1.609 billion as of 2025) \70\ to report loans to
businesses in original amounts of $1 million or less. For the purposes
of estimating the impacts of the proposed rule, the Bureau follows the
convention of using small loans to businesses as a proxy for loans to
small businesses and small loans to farms as a proxy for loans to small
farms.\71\ These are the best data available for estimating the number
of banks and savings associations that may be covered by the proposed
rule. However, the Bureau acknowledges that the true number of covered
banks and savings associations may be different than what is presented
here. The Bureau acknowledges that it does not have sufficient
information to meaningfully account for how the proposed change to the
small business definition and the proposed minimum loan size threshold
might affect the impacts of the rule.
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\70\ See Fed. Fin. Insts. Examination Council, Community
Reinvestment Act Reporting Criteria, <a href="https://www.ffiec.gov/data/cra/reporting-criteria">https://www.ffiec.gov/data/cra/reporting-criteria</a> (last visited Oct. 4, 2025).
\71\ For a discussion of the small business lending proxy, see
Jacob Goldston & Yan Y. Lee, Measurement of Small Business Lending
Using Call Reports: Further Insights From the Small Business Lending
Survey (Fed. Deposit Ins. Corp. Staff Rept. No. 2020-04, July 2020),
<a href="https://www.fdic.gov/analysis/cfr/staff-studies/2020-04.pdf">https://www.fdic.gov/analysis/cfr/staff-studies/2020-04.pdf</a>.
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Although banks and savings associations reporting under the CRA are
required to report the number of originations of small loans to
businesses and farms, the Bureau is not aware of any comprehensive
dataset that contains originations made by banks and savings
associations with assets below the CRA reporting threshold. To fill
this gap, the Bureau simulated plausible values for the annual number
and dollar value of originations for each bank and savings association
that falls below the CRA reporting threshold for 2022 and 2023.\72\ The
Bureau generated simulated originations in order to account for the
uncertainty around the exact number and value of originations for these
banks and savings associations. To simulate these values, the Bureau
assumes that these banks have the same relationship between outstanding
and originated small loans to businesses and farms as banks and savings
associations above the CRA reporting threshold. First, the Bureau
estimated the relationship between originated number and balances and
outstanding numbers and balances of small loans to businesses and farms
for CRA reporters. Then the Bureau used this estimate, together with
the outstanding numbers and balances of small loans to businesses and
farms of non-CRA reporters, to simulate these plausible values of
originations. The Bureau has documented this methodology in more detail
in its Supplemental estimation methodology for institutional coverage
and market-level cost estimates in the small business lending rule
released with the 2023 final rule.\73\
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\72\ Based on FFIEC Call Report data as of December 2023, of the
4,587 banks and savings associations that existed in 2023, only
about 14 percent were required to report under CRA. That is, only
about 14 percent of banks and savings associations had assets below
$1.503 billion, the CRA reporting threshold in 2023. See Fed. Fin.
Insts. Examination Council, CRA Reporting Criteria, <a href="https://www.ffiec.gov/data/cra/reporting-criteria">https://www.ffiec.gov/data/cra/reporting-criteria</a> (last visited Sept. 23,
2025).
\73\ CFPB, Supplemental estimation methodology for institutional
coverage and market-level cost estimates in the small business
lending rulemaking (Mar. 30, 2023), <a href="https://www.consumerfinance.gov/data-research/research-reports/supplemental-estimation-methodology-institutional-coverage-market-level-cost-estimates-small-business-lending-rulemaking/">https://www.consumerfinance.gov/data-research/research-reports/supplemental-estimation-methodology-institutional-coverage-market-level-cost-estimates-small-business-lending-rulemaking/</a>.
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Based on 2023 data from FFIEC and NCUA Call Reports and the CRA
data, using the methodology described above, the Bureau estimates that
the number of depository institutions that would be required to report
under the proposed rule is between approximately 172 to 181, as shown
in Table 1 below. This comprises between 167 and 176 banks and savings
associations and 5 credit unions that would be required to report under
the proposed rule. These ranges represent 95 percent confidence
intervals over the number of credit unions, banks and savings
associations that would be covered under the proposed rule. The Bureau
presents this range to reflect the uncertainty associated with the
estimates and notes that the uncertainty is driven by the lack of data
on originations by banks and savings associations below the CRA
reporting threshold.\74\
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\74\ The Bureau acknowledges that these confidence intervals do
not account for all uncertainty in the estimates. For example, the
confidence interval does not account for how well number of small
loans to businesses proxies for number of originations of covered
products. The Bureau is unaware of information that could be used to
quantify these additional sources of uncertainty.
Table 1--Estimated Depository Institution Coverage of the Proposed Rule
[In 2023, based on 2022-2023 data]
------------------------------------------------------------------------
Coverage category Estimated coverage
------------------------------------------------------------------------
Institutions Subject to 1071 Reporting. 172-181 depository institutions
(1.85%-1.95% of all depository
institutions).
Banks and Savings Associations (SAs) 167-176 banks and SAs (3.64%-
Subject to Reporting. 3.84% of all banks and SAs).
Credit Unions Subject to Reporting..... 5 credit unions (0.11% of all
credit unions).
Share of Total Small Business Credit by 91.9%-92.8%.
Depository Institutions (Number of
Loans Originated) Captured.
Share of Total Small Business Credit by 60.3%-62.0%.
Depository Institutions (Dollar Value
of Loans Originated) Captured.
------------------------------------------------------------------------
The Bureau also estimates the number of institutions that would
have been covered under the baseline but are no longer covered by the
proposed rule, using the same methodology discussed above. A depository
institution would have been covered at the end of 2023 by the 2023
final rule if that institution had over 100 small business and small
farm loan originations in 2022 and 2023, accounting for mergers. The
Bureau estimates that the number of depository institutions required to
report under the 2023 final rule but that would not be required to
report under the proposed rule is between approximately 1,421 to 1,570
institutions as shown in Table 2 below.
[[Page 50971]]
Table 2--Estimated Depository Institutions Covered Under Baseline but No
Longer Covered by Proposed Rule
[In 2023, based on 2022-2023 data]
------------------------------------------------------------------------
Coverage category Estimated coverage
------------------------------------------------------------------------
Institutions No Longer Covered......... 1,421-1,570 depository
institutions (15.3%-16.9% of
all depository institutions).
Banks and Savings Associations (SAs) No 1,301-1,450 banks and SAs
Longer Covered. (28.4%-31.6% of all banks and
SAs).
Credit Unions No Longer Covered........ 120 credit unions (2.6% of all
credit unions).
Share of Total Small Business Credit by 5.0%-5.7%.
Depository Institutions (Number of
Loans Originated) by DIs No Longer
Covered.
Share of Total Small Business Credit by 24.1%-26.1%.
Depository Institutions (Dollar Value
of Loans Originated) by DIs No Longer
Covered.
------------------------------------------------------------------------
The Bureau does not have sufficient information to meaningfully
estimate the change in the number of nondepositories relative to the
analysis conducted for the 2023 final rule. For the purposes of the
analysis of the impacts of this proposed rule, the Bureau assumes that
the number of nondepository institutions that are active in the small
business lending market has not changed since the 2023 final rule,
except for Farm Credit System members, for which the Bureau relies on
data from the Farm Credit Administration. See part II.D of the 2023
final rule for more detail on how the Bureau arrived at these
estimates.\75\ Consistent with the assumptions in the 2023 final rule,
the Bureau also assumes that only online lenders and merchant cash
advance providers originate more than 1,000 loans each year and the
remaining nondepositories originate between 150 and 999 loans each
year. Since merchant cash advances would not be covered credit
transactions under the proposed rule, no merchant cash advance
providers would be required to report. Based on these assumptions, the
Bureau concludes that only online lenders would still be required to
report under the proposed rule.
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\75\ See 88 FR 35153.
---------------------------------------------------------------------------
The Bureau estimates that the 2023 final rule would have covered
about 610 nondepository institution, consisting of: about 30 online
lenders; about 140 nondepository Community Development Financial
Institutions (CDFIs); about 70 merchant cash advance providers; about
240 commercial finance companies; about 70 governmental lending
entities; and 60 Farm Credit System members.\76\ The Bureau estimates
that, of these nondepositories, only the 30 online lenders will
continue to be covered under the proposed rule and the remaining will
be impacted by the proposed rule because they are no longer covered.
---------------------------------------------------------------------------
\76\ Farm Credit Admin., Number of FCS banks and associations by
type and district as of January 1, 2024, <a href="https://www.fca.gov/template-fca/bank/20240101NumberAssocs.pdf">https://www.fca.gov/template-fca/bank/20240101NumberAssocs.pdf</a> (last visited Oct. 1,
2025).
---------------------------------------------------------------------------
The Bureau seeks comments on these estimates of coverage and
changes in coverage. In particular, the Bureau seeks additional data
and information that it could use to improve its estimates of
nondepository institution coverage.
E. Methodology for Generating Costs and Benefits Estimates
In part IX.E of the 2023 final rule, the Bureau explained its
methodology for generating estimates of one-time and ongoing costs
associated with complying with the 2023 final rule. As discussed in the
previous section, many financial institutions that were covered by the
2023 final rule would no longer be covered by this proposed rule. Thus,
the proposed rule would confer a benefit in the form of cost savings
for most impacted institutions. The Bureau also expects that
institutions that continue to be covered will face a reduction in
compliance costs from the proposed rule relative to the baseline.
Generally, the Bureau estimates the benefits of the proposed rule by
comparing the compliance costs under the baseline to those under the
proposed rule. To generate cost estimates under the baseline and this
proposed rule, the Bureau uses the same methodology as the 2023 final
rule, unless otherwise noted. Throughout this section, the Bureau
reproduces crucial parts of the methodology discussion where necessary
but references the 2023 final rule for additional detail and
background.
The Bureau expects that compliance costs vary with the complexity
of a financial institution's compliance operations. Consistent with the
2023 final rule and for the purposes of this proposed rule, the Bureau
categorizes impacted financial institutions (FIs) into Types A, B, and
C in increasing order of compliance operations complexity. Based on its
prior methodology, the Bureau assumes that this complexity is
correlated with the number of small business loan applications
received, and therefore categorizes institutions based on application
volume. The Bureau assumes that Type A FIs receive fewer than 300
applications per year, Type B FIs receive between 300 and 2,000
applications per year, and Type C FIs receive more than 2,000
applications per year. The Bureau assumes that, for Type A and B FIs,
one out of two small business applications will result in an
origination. Thus, the Bureau assumes that Type A FIs originate fewer
than 150 covered credit transactions per year and Type B FIs originate
between 150 and 999 covered credit transactions per year. The Bureau
assumes that Type C FIs originate one out of three small business
applications and at least 1,000 covered credit transactions per
year.\77\
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\77\ The Bureau chose the 1:2 and 1:3 application to origination
ratios based on two sources of information. First see Biz2Credit,
Small Business Loan Approval Rates Rebounded in May 2020: Biz2Credit
Small Business Lending Index (May 2020), <a href="https://cdn.biz2credit.com/appfiles/biz2credit/pdf/report-may-2020.pdf">https://cdn.biz2credit.com/appfiles/biz2credit/pdf/report-may-2020.pdf</a>, which shows that, in
December of 2019, large banks approved small business loans at a
rate of 27.5 percent, while small banks and credit unions had
approval rates of 49.9 percent and 40.1 percent. Additionally, the
Bureau's supervisory data supports a 33 percent approval rate as a
conservative measure among these estimates for complex financial
institutions (Type C FIs).
---------------------------------------------------------------------------
The Bureau recognizes that the proposed changes, as discussed in
subsequent sections, will remove most Types A and B financial
institutions from coverage. However, the Bureau maintains both these
categorizations and assumptions in order to estimate compliance at
baseline and compare it to coverage under the proposals.
The Bureau understands that compliance costs vary across financial
institutions due to many factors, such as size, operational structure,
and product complexity, and that this variance exists on a continuum
that is very difficult or impossible to fully represent. Due to data
limitations, the Bureau is unable to capture many of the ways in which
compliance costs vary by institution,
[[Page 50972]]
and therefore uses these representative financial institution types
with the above assumptions for its analysis. In order to aggregate
costs to a market level, the Bureau must map financial institutions
onto its types using discrete volume categories.
For the hiring costs discussion in part IV.F.1.i and ongoing costs
discussion in part IV.F.1.ii below, the Bureau discusses costs in the
context of representative institutions for ease of exposition. The
Bureau assumes that a representative Type A FI receives 100 small
business credit applications per year, a representative Type B FI
receives 400 small business credit applications per year, and a
representative Type C FI receives 6,000 small business credit
applications per year. The Bureau further assumes that a representative
Type A FI originates 50 covered credit transactions per year, a
representative Type B FI originates 200 covered credit transactions per
year, and a representative Type C FI originates 2,000 covered credit
transactions per year.
1. Methodology for Estimating One-Time Compliance Costs
The one-time compliance cost estimation methodology for the
proposed rule described in this section is the same methodology that
the Bureau used in the 2023 final rule, unless otherwise noted.
The Bureau has identified the following nine categories of one-time
costs that will likely be incurred by financial institutions to develop
the infrastructure to collect and report data under the baseline and
the proposed rule:
1. Preparation/planning.
2. Updating computer systems.
3. Testing/validating systems.
4. Developing forms/applications.
5. Training staff and third parties (such as brokers).
6. Developing policies/procedures.
7. Legal/compliance review.
8. Post-implementation review of compliance policies and
procedures.
9. Hiring costs.\78\
---------------------------------------------------------------------------
\78\ The Bureau added this category in response to comments on
the 2021 proposed rule; it was not part of the 2020 survey discussed
below.
---------------------------------------------------------------------------
The Bureau also conducted a survey in 2020 regarding one-time
implementation costs for section 1071 compliance targeted at financial
institutions who extend small business credit.\79\ The survey collected
information on the number of employee hours and non-salary expenses
required to implement a section 1071 rule. The Bureau developed the
survey instrument based on guidance from industry on the potential
types of one-time costs institutions might incur if required to report
under a rule implementing section 1071 and tested the survey instrument
on a small set of financial institutions, incorporating their feedback
prior to implementation. The Bureau worked with several major industry
trade associations to recruit their members to respond to the survey. A
total of 105 financial institutions responded to the survey.
---------------------------------------------------------------------------
\79\ The One-Time Cost Survey was released on July 22, 2020; the
response period closed on October 16, 2020. The OMB control number
for this collection is 3170-0032. CFPB, Survey: Small Business
Compliance Cost Survey (July 22, 2020), <a href="https://files.consumerfinance.gov/f/documents/cfpb_1071-survey_2020-10.pdf">https://files.consumerfinance.gov/f/documents/cfpb_1071-survey_2020-10.pdf</a>.
---------------------------------------------------------------------------
Estimates from the 2020 survey respondents continue to form the
basis of the Bureau's estimates for one-time compliance costs in
assessing the impact of this proposed rule. The survey was broadly
designed to ask about the one-time costs of reporting data under a
regime that only included mandatory data points, used a reporting
structure similar to HMDA, used the Regulation B definition of an
``application,'' and used the respondent's own internal small business
definition.\80\ Therefore, the Bureau assumes that the tasks listed
above are associated with implementing both the 2023 final rule and the
proposed rule for institutions covered by each rule.
---------------------------------------------------------------------------
\80\ For more information about the 2020 survey and its
respondents, see part IX.E.1 of the 2023 final rule.
---------------------------------------------------------------------------
The Bureau assumes that the number of employee hours required to
implement each task has not changed but that the wages have changed to
reflect labor market developments. The Bureau assumes that each task
may require junior, mid-level, and senior staff hours to implement. For
junior staff, the Bureau uses $18.51, the 10th percentile hourly wage
estimate for ``loan officers'' according to the 2024 Occupational
Employment Statistics compiled by the Bureau of Labor Statistics.\81\
For mid-level staff, the Bureau uses $41.35, the estimated mean hourly
wage estimate for ``loan officers.'' For senior staff, the Bureau uses
$70.09, the 90th percentile hourly wage estimate for ``loan officers.''
To account for non-monetary compensation, the Bureau also scaled these
hourly wages up by 43 percent.\82\
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\81\ See U.S. Bureau of Labor Stat., U.S. Dep't of Labor,
Occupational Employment and Wage Statistics (May 2024), <a href="https://www.bls.gov/oes/current/oes132072.htm">https://www.bls.gov/oes/current/oes132072.htm</a>.
\82\ The June 2025 Employer Costs for Employee Compensation from
the Bureau of Labor Statistics documents that wages and salaries
are, on average, about 70 percent of employee compensation for
private industry workers. The Bureau inflates the hourly wage to
account for 100 percent of employee compensation ((100/70)-1) * 100
= 43 percent). Press Release, U.S. Bureau of Labor Stat., U.S. Dep't
of Labor, USDL-25-1358, Employer Costs for Employee Compensation--
June 2025 (Sept. 12, 2025), <a href="https://www.bls.gov/news.release/pdf/ecec.pdf">https://www.bls.gov/news.release/pdf/ecec.pdf</a>.
---------------------------------------------------------------------------
Finally, the Bureau assumes that the non-salary expenses necessary
to implement each one-time task have only changed according to
inflation, as measure the by the Consumer Price Index.\83\
---------------------------------------------------------------------------
\83\ The Bureau uses the CPI-U from the Bureau of Labor
Statistics and adjusts non-salary expenses to account for inflation
between December 2019 and June 2025. That is, the Bureau inflates
non-salary expenses by 26 percent. See U.S. Bureau of Labor Stat.,
U.S. Dep't of Labor, Databases, Tables & Calculators by Subject,
Consumer Price Index for All Urban Consumers (CPI-U) (Oct. 4, 2025),
<a href="https://data.bls.gov/timeseries/CUUR0000SA0">https://data.bls.gov/timeseries/CUUR0000SA0</a>.
---------------------------------------------------------------------------
For hiring costs, the Bureau also assumes that a covered financial
institution would need to hire enough full-time equivalent workers
(FTEs) to cover the estimated number of staff hours necessary to comply
with the either 2023 final rule or the proposed rule on an annual,
ongoing basis. In part IV.E.2 below, the Bureau describes how it
estimates the ongoing costs to comply with the 2023 final rule and the
proposed rule, including the number of hours of staff time an
institution needs per application. The Bureau assumes for the baseline
and the proposed rule that an FTE will work about 2,080 hours each year
(40 hours per week x 52 weeks = 2,080). The Bureau calculates that the
total number of FTEs that a covered financial institution will need to
hire as the number of hours per application multiplied by the estimated
number of applications received per year divided by 2,080, rounded up
to the next full FTE. For example, if an institution receives 500
applications per year and an employee spends one hour on each
application, it will need to hire one FTE ((1 * 500)/2080 = 0.24, which
is rounded up to the next full FTE, i.e., 1). In part IV.F.1.i, the
Bureau also confirms that the estimated additional staff can cover the
estimated staff hours required for implementing other one-time changes.
The Bureau calculates the hiring costs using the estimated cost-
per-hire of $4,683, estimated by the Society for Human Resource
Management.\84\ This estimated cost includes advertising fees,
recruiter pay and benefits, and employee referrals, among other
categories. For each covered financial institution, the estimated
hiring cost is
[[Page 50973]]
$4,683 multiplied by the estimated new FTEs required to comply with the
requirements of the 2023 final rule or the proposed rule. The estimated
total one-time costs are the sum of the estimated hiring costs and the
other one-time costs for that institution discussed above.
---------------------------------------------------------------------------
\84\ See Soc'y for Hum. Res. Mgmt., SHRM Benchmarking: Talent
Access Report, at 8 (2022), <a href="https://www.shrm.org/content/dam/en/shrm/research/benchmarking/Talent%20Access%20Report-TOTAL.pdf">https://www.shrm.org/content/dam/en/shrm/research/benchmarking/Talent%20Access%20Report-TOTAL.pdf</a>.
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The Bureau assumes that some financial institutions covered by the
2023 final rule have already incurred some one-time costs in order to
comply with the rule. For institutions that would no longer be covered
under the proposed rule, those costs are sunk and cannot be recouped.
The Bureau believes that, while some one-time cost activities already
underway could be used for complying with this proposed rule, some of
those activities will need to be redone in order to comply. The Bureau
makes this rough assumption to capture this possibility and potential
sunk cost. As discussed above, the Bureau believes, to the extent this
has occurred, this reduces the institution's potential benefits under
this proposed rule. The Bureau does not have sufficient information
upon which to base its estimate of how much these institutions may have
already spent upgrading their systems and, instead, makes an assumption
that institutions that would no longer be covered under the proposed
rule, on average, will have incurred 25 percent of their baseline non-
hiring one-time costs. That is, institutions no longer covered by the
rule would save 75 percent of the estimated non-hiring one-time costs,
under the baseline, because they have not yet spent those resources.
The Bureau assumes that these institutions have not yet hired new
employees under the baseline. The Bureau believes these are reasonable
assumptions as to the extent of one-time costs already incurred by
these institutions. Under these assumptions, the total cost savings for
institutions that would no longer be covered is estimated to be 75
percent of the one-time costs of implementing tasks 1-8 listed above,
plus the expected hiring costs associated with the baseline. The Bureau
seeks comment on the validity of these assumptions and the extent to
which financial institutions have already incurred one-time costs to
comply with the 2023 final rule.
Institutions that were covered under the baseline may have
implemented changes to their processes and systems to comply with the
2023 final rule. If an institution would no longer be covered under the
proposed rule, some of these costs may be sunk. For example, the
institution may have developed a manual of policies and procedures that
are no longer required if the institution is no longer covered. To the
extent these institutions have already incurred these expenses, the
Bureau believes this reduces their one-time cost savings from the
proposed rule.
If an institution remains covered under the proposed rule, some of
their implementation may continue to be applicable under the proposed
rule. Other parts of their implementation may need to be changed to
comply the proposed rule, and thus the institution may incur the same
one-time cost again. For example, an institution that already started
designing data collection forms may have to change the design. The
Bureau includes incurring these expenses again as part of its
calculation for institutions that remain covered.
The Bureau does not have the requisite information to empirically
estimate how much of the one-time costs, under the baseline, any
institution is likely to have incurred. Therefore, the Bureau has
decided to make a simple assumption. The Bureau assumes that all
institutions will have incurred 25 percent of their non-hiring, one-
time costs, at baseline, in preparation to comply with the 2023 final
rule. For financial institutions that were covered under the 2023 final
rule but would not be covered under the proposed rule, the Bureau
assumes that the proposed rule will save the remaining 75 percent of
the non-hiring, one-time costs, at baseline, plus their hiring costs.
For institutions that are covered under the baseline and would be
covered under the proposed rule, the Bureau assumes that 25 percent of
one-time, non-hiring costs under the baseline have already been
incurred and are, likewise, sunk. Therefore, the one-time cost savings
for these institutions are the one-time hiring and non-hiring costs
under the proposed rule minus the one-time hiring costs and 75 percent
of the non-hiring costs under the baseline.
The Bureau seeks comments on its methodology for estimating one-
time costs. In particular, the Bureau seeks comments on whether
financial institutions that would have been covered under the 2023
final rule have already spent resources to implement the 2023 final
rule and, if so, on what they have spent those resources. Further, the
Bureau seeks comments on whether financial institutions that would be
covered by the proposed rule and have spent resources to implement the
2023 final rule could use those changes to comply with the proposed
rule.
2. Methodology for Estimating Ongoing Compliance Costs
In the 2023 final rule, the Bureau identified 15 specific data
collection and reporting activities that would impose ongoing
compliance costs for covered institutions and continues to use those
activities as an organization principle for its analysis of the impacts
of this proposed rule. Table 3 presents the full list of the 15
activities. The Bureau assumes that substantially the same activities
would be needed to comply with the proposed rule. Activities 1 through
3 can broadly be described as data collection activities: these tasks
are required to intake data and transfer it to the financial
institution's small business data entry system. Activities 4 through 10
are related to reporting and resubmission: these tasks are necessary to
collect required data, conduct internal checks, and report data
consistent with the 2023 final rule or the proposed rule. Activities 11
through 13 are related to compliance and internal audits: employee
training, and internal and external auditing procedures required to
ensure data consistency and reporting in compliance with the 2023 final
rule or the proposed rule. Finally, activities 14 and 15 are related to
small business lending examinations by regulators: these tasks would be
undertaken to prepare for and assist during regulatory compliance
examinations. For the purpose of this analysis and for consistency with
the 2023 final rule, the Bureau assumes that all financial institutions
covered under the proposed rule or the baseline will be subject to
regulatory compliance examinations and thus incur costs related to
activities 14 and 15.
Table 3 also provides an example of how the Bureau calculates
ongoing compliance costs associated with each compliance task. The
table shows the calculation for each activity and notes whether the
task would be a ``variable cost,'' which would depend on the number of
applications the institution receives, or a ``fixed cost'' that does
not depend on the number of applications. Table 3 shows these
calculations for a Type A FI, or the institution with the least amount
of complexity. Table 4 below summarizes the activities whose
calculation differs by institution complexity and shows the
calculations for Type B FIs and Type C FIs (where they differ from
those for a Type A FI).
[[Page 50974]]
Table 3--Ongoing Compliance Cost Calculations for a Type A FI
------------------------------------------------------------------------
No. Activity Calculation Type \85\
------------------------------------------------------------------------
1............... Transcribing data. Hourly Variable.
compensation x
hours per app. x
applications.
2............... Resolving Hourly Variable.
reportability compensation x
questions. hours per app.
with question x
applications
with questions.
3............... Transfer to Data Hourly Variable.
Entry System, compensation x
Loan Origination hours per app. x
System, or other applications.
data storage
system.
4............... Complete geocoding Hourly Variable.
data. compensation x
hours per app. x
applications.
5............... Standard annual Hourly Fixed.
edit and internal compensation x
checks. hours spent on
edits and checks.
6............... Researching Hourly Variable.
questions. compensation x
hours per app.
with question x
applications
with questions.
7............... Resolving question Hourly Variable.
responses. compensation x
hours per app.
with question x
applications
with questions.
8............... Checking post- Hourly Variable.
submission edits. compensation x
hours checking
post-submission
edits per
application.
9............... Filing post- Hourly Fixed.
submission compensation x
documents. hours filing
post-submission
docs.
10.............. Small business Uses free Fixed.
data reporting/ geocoding
geocoding software.
software.
11.............. Training.......... Hourly Fixed.
compensation x
hours of
training per
year x number of
loan officers.
12.............. Internal audit.... No internal audit Fixed.
conducted by
financial
institution
staff.
13.............. External audit.... One external Fixed.
audit per year.
14.............. Exam preparation.. Hourly Fixed.
compensation x
hours spent on
examination
preparation.
15.............. Exam assistance... Hourly Fixed.
compensation x
hours spent on
examination
assistance.
------------------------------------------------------------------------
Many of the activities in Table 3 require time spent by loan
officers and other financial institution employees. To account for time
costs, the calculation uses the hourly compensation of a loan officer
multiplied by the amount of time required for the activity. The Bureau
uses a mean hourly wage of $41.35 for loan officers, based on data from
the Bureau of Labor Statistics.\86\ To account for non-monetary
compensation, the Bureau scales this hourly wage by 43 percent to
arrive at a total hourly compensation of $59.07 for use in these
calculations.\87\ As an example of a time calculation, the Bureau
assumes that transcribing the data points that would be required under
the baseline would require approximately 11 minutes per application for
a Type A FI. The calculation multiplied the number of minutes by the
number of applications and the hourly compensation to arrive at the
total cost, on an annual basis, of transcribing data. As another
example, the Bureau assumes that ongoing training for loan officers to
comply with a financial institution's 1071 policies and procedures
would take about two hours per loan officer per year. The cost
calculation multiplies the number of hours by the number of loan
officers and by the hourly compensation.
---------------------------------------------------------------------------
\85\ In this table, the term ``variable'' means the compliance
cost depends on the number of applications. The term ``fixed'' means
the compliance cost does not depend on the number of applications
(even if there are other factors upon which it may vary).
\86\ These data reflect the mean hourly wage for ``loan
officers'' according to the 2024 Occupational Employment Statistics
compiled by the Bureau of Labor Statistics. See U.S. Bureau of Labor
Stat., U.S. Dep't of Labor, Occupational Employment and Wages
Statistics (May 2024), <a href="https://www.bls.gov/oes/current/oes132072.htm">https://www.bls.gov/oes/current/oes132072.htm</a>.
\87\ The June 2025 Employer Costs for Employee Compensation from
the Bureau of Labor Statistics documents that wages and salaries
are, on average, about 70 percent of employee compensation for
private industry workers. The Bureau inflates the hourly wage to
account for 100 percent of employee compensation ((100/70)-1) * 100
= 43 percent). Press Release, U.S. Bureau of Labor Stat., U.S. Dep't
of Labor, USDL-25-1358, Employer Costs for Employee Compensation--
June 2025 (Sept. 12, 2025), <a href="https://www.bls.gov/news.release/pdf/ecec.pdf">https://www.bls.gov/news.release/pdf/ecec.pdf</a>.
---------------------------------------------------------------------------
In the 2023 final rule, the Bureau explained how it arrived at its
assumed number of hours required per task and makes the same
assumptions in this proposed rule.
Some activity costs in Table 3 depend on the number of
applications. It is important to differentiate between these variable
costs and fixed costs that do not depend on number of applications
because the type of cost impacts whether and to what extent covered
institutions might be expected to pass on their costs to small business
loan applicants in the form of higher interest rates or fees (discussed
in more detail in part IV.F.2 below). Data collection, reporting, and
submission activities such as geocoding data, standard annual edits and
internal checks, researching questions, and resolving question
responses are variable costs. All other activities are fixed costs
because they do not depend on the overall number of applications being
processed. An example of a fixed cost calculation is exam preparation,
where the hourly compensation is multiplied by the number of total
hours required by loan officers to prepare for 1071-related compliance
examinations.
Table 4 shows where and how the Bureau assumes Type B FIs and Type
C FIs differ from Type A FIs for the purposes of evaluating ongoing
cost. Table 4 shows the activities where the assumptions differ from
those in Table 3. Type B FIs and Type C FIs use more automated
procedures, which result in different cost calculations. For example,
for Type B FIs and Type C FIs, transferring data to the data entry
system and geocoding applications are done automatically by business
application data management software licensed annually by the financial
institution. The relevant address is submitted for geocoding via batch
processing, rather than done manually for each application. The
additional ongoing geocoding costs reflect the time spent by loan
officers on ``problem'' applications--that is, a percentage of overall
applications that the geocoding software misses--rather than time spent
on all applications. However, Type B FIs and Type C FIs have the
additional ongoing cost of a subscription to a geocoding software or
service as well as a data management software that represents an annual
fixed cost of reporting 1071 data. This is an additional ongoing cost
that the less complex Type A FIs would not have incurred. The Bureau
expects that Type A FIs will use free geocoding software available from
the FFIEC or the Bureau, which may include a new batch
[[Page 50975]]
function that could be developed by either the FFIEC or the Bureau.
Additionally, audit procedures differ between the three
representative institution types. The Bureau expects a Type A FI would
not conduct an internal audit but would pay for an annual external
audit. A Type B FI would be expected to conduct a simple internal audit
for data checks and also pay for an external audit on an annual basis.
Type C FIs would have a sophisticated internal audit process in lieu of
an external audit.
Table 4--Differences in Ongoing Cost Calculations for Type B FIs and
Type C FIs Versus Type A FIs
------------------------------------------------------------------------
Difference for a Difference for a
No. Activity Type B FI Type C FI
------------------------------------------------------------------------
3.............. Transfer to Data No employee time No employee time
Entry System. cost. cost.
Automatically Automatically
transferred by transferred by
data management data management
software software
purchased/ purchased/
licensed. licensed.
4.............. Complete Cost of time per Few applications
geocoding data. application that require
unable to be manual
geocoded by attention.
software. Completed by
third-party
software vendor.
10............. Small business Uses geocoding Uses geocoding
data reporting/ software and/or software and/or
geocoding data management data management
software. software that software that
requires annual requires annual
subscription. subscription.
12............. Internal Audit... Hourly Hourly
compensation x compensation x
hours spent on hours spent on
internal audit. internal audit.
13............. External Audit... Yearly fixed Only an extensive
expense on internal audit
external audit. and no expenses
on external
audits.
------------------------------------------------------------------------
Table 5 below shows major assumptions that the Bureau makes for
each activity for each type of financial institution. Based on the
proposed rule and inflation, the Bureau has made changes to
corresponding assumptions from the 2023 final rule where appropriate.
In particular, the proposed changes eliminating several data points are
the biggest source of changes to the assumptions relative to the 2023
final rule. Because fewer data point would be collected under the
proposed rule than under the 2023 final rule, the Bureau assumes that
tasks which depend on the number of data points would see a reduction
in required employee hours. The Bureau has also updated the assumed
fixed cost of software and audits to account for inflation. Table 5
also shows the number of hours assumed in the baseline scenario, for
comparison.
Table 5 provides the total number of hours the Bureau assumes are
required for each task that requires labor. For example, the Bureau
assumes that transcribing data for 100 applications will require 14
hours of labor. The table also shows the assumed fixed cost of software
and audits, as well as areas where the Bureau assumes there would be
cost savings due to use of technology. In several cases, the activity
described in a row does not apply to financial institutions of a
certain type and is therefore entered in the table as not applicable
(N/A).
Table 5--Major Assumptions for the Representative Type A FIs, Type B FIs, and Type C FIs,\88\ Under the Proposed
Rule and the Baseline \89\
----------------------------------------------------------------------------------------------------------------
No. Activity Type A FI Type B FI Type C FI
----------------------------------------------------------------------------------------------------------------
1................... Transcribing data.... 14 hours total (19 26 hours total (38 414 hours total (571
baseline). baseline). baseline).
2................... Resolving 8 hours total (11 17 hours total (23 25 hours total (34
reportability baseline). baseline). baseline).
questions.
3................... Transfer to 1071 data 14 hours total (19 N/A.................. N/A.
management software. baseline).
4................... Complete geocoding 7 hours total; 10 hours total (0.5 N/A.
data. reduction in time hours per
cost relative to ``problem'' loan x
HMDA for software 5% of loans that are
with batch ``problem'').
processing.
5................... Standard annual edit 13 hours total; 259 hours total; 537 hours total;
and internal checks. reduction for online reduction for online reduction for online
submission platform submission platform submission platform
(18 baseline). (357 baseline). (741 baseline).
6................... Researching questions 4 hours total (6 8 hours total (11 12 hours total (17
baseline). baseline). baseline).
7................... Resolving question 1 hour total......... 1 hour total......... 1 hour total.
responses.
8................... Checking post- 1 hour total......... 3 hours total (5 13 hours total (18
submission edits. baseline). baseline).
9................... Filing post- <1 hour total........ <1 hour total........ <1 hour total.
submission documents.
10.................. 1071 data management N/A.................. $10,080.............. $17,199.
system/geocoding
software.
11.................. Training............. 24 hours total....... 120 hours total...... 800 hours total.
12.................. Internal audit....... N/A.................. 8 hours total........ 2,304 hours total.
13.................. External audit....... $4,410............... $6,300............... N/A.
14.....
[…truncated; see source link]Indexed from Federal Register on November 13, 2025.
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