CFPB officially delays small-business reporting rule

• Key insight: The Consumer Financial Protection Bureau has officially finalized a rule that will delay 1071 compliance amid lawsuits.
• What’s at stake: The rule, originally slated to go into effect in 2025, has been challenged in court over compliance costs. 
• Forward look: The CFPB has said it plans to rewrite the rule in the interim. 

WASHINGTON — The Consumer Financial Protection Bureau has given banks and other lenders another year to comply with its small-business data collection rule, marking a significant pause as the agency prepares to rewrite the regulation amid lawsuits from both industry and consumer groups.

In a notice published Thursday in the Federal Register, the CFPB said lenders would not have to begin reporting demographic and credit application data until mid-2026 or later, depending on their size. Large lenders will start July 1, 2026, while smaller cohorts will have to comply with the rule in January and October of 2027. The agency said the extension will provide a uniform timeline after courts issued separate orders delaying compliance for certain institutions.

The notice finalizes an interim rule released earlier this year pushing back the compliance deadline. 

“To facilitate consistent compliance across all covered financial institutions, in the 2025 interim final rule, the CFPB extended the compliance dates set forth in the 2024 interim final rule by approximately one year,” the CFPB said. “The CFPB now confirms its belief that this extension of the compliance date should be sufficient to ensure uniformity of compliance dates with the court-ordered stays and for the CFPB to issue a new proposal to reconsider certain aspects of the 2023 final rule.”

The original rule, first finalized in March 2023, stems from Section 1071 of the Dodd-Frank Act, which requires financial institutions to collect and disclose information on small-business lending. Supporters, including civil rights and community organizations, have long argued that the data is critical to identifying potential discrimination against women- and minority-owned firms.

“Today’s rule delays implementation by at least another year, adding up to 16 years since the underlying statute was passed by Congress in 2010,” said Jesse Van Tol, president and CEO of the National Community Reinvestment Coalition. “Every year of delay means more small businesses are left without the transparency they deserve and the ability to hold lenders accountable for fair lending and access to credit.”

Industry groups and consumer groups have filed lawsuits against the bureau related to the rule. 

An appeals court temporarily halted the CFPB’s 1071 rule earlier this year, granting a partial stay to two Texas banks and members of four bank trade groups that sued the CFPB to stop the data collection on small-business loan applicants from going into effect.

Consumer groups later filed a lawsuit against the bureau, alleging that the CFPB under the Trump administration violated the Equal Credit Opportunity Act and the Administrative Procedures Act when acting CFPB Director Russell Vought said in a memo that the CFPB would not comply with the 1071 rule. In June, Vought issued an interim final rule that extended the compliance deadlines of 1071 by another year to July 2026.

The CFPB “has never collected the data required by Section 1071, much less made it available to the public,” the groups, including NCRC, said in the lawsuit. “And recently, it has taken actions announcing it would continue to refuse to perform its long-overdue obligations.”