BPI Comments on CFPB Proposed Changes to the Equal Credit Opportunity Act

Ladies and Gentlemen:

The Bank Policy Institute[1] appreciates the opportunity to comment on the notice of proposed rulemaking (“NPR,” the “proposed rule,” or the “Small Business Data Collection Rule”)[2] issued by the Consumer Financial Protection Bureau (“CFPB” or “Bureau”) to amend Regulation B to implement

changes to the Equal Credit Opportunity Act (“ECOA”) made by section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”).

BPI fully supports the goals of section 1071 to facilitate the enforcement of fair lending laws and enable communities, governmental entities, and creditors to identify business and community development needs and opportunities of women-owned, minority-owned and small businesses. The collection of applicant data under the Small Business Data Collection Rule can help promote fair lending and help financial institutions identify and better serve the needs of small business credit applicants, including women- and minority-owned small businesses. At the same time, the Small Business Data Collection Rule should not become so burdensome and unwieldy that it limits access to credit, discourages small business owners from seeking credit, or erects barriers that inhibit financial institutions from offering small business credit, which would undermine the purposes of section 1071.

To strike the right balance, BPI believes that the Small Business Data Collection Rule should be consistent with the following seven guiding principles: (1) adequate time to comply; (2) simplicity; (3) data accuracy, integrity, and quality; (4) respect for applicant preferences and choices; (5) appropriate tailoring of the rule’s scope and coverage; (6) transparency; and (7) clear guidance and flexibility. We discuss these guiding principles in greater detail in Section I.B. below. Incorporating these guiding

principles into the final rule is the surest way to fulfill the statutory purposes of section 1071, promote compliance, and ensure the collection and reporting of accurate, reliable, high-quality data without undermining access to credit or compromising applicant privacy. We urge the Bureau to adhere to these principles in the final rule.

Certain parts of the proposed rule appropriately reflect these guiding principles. Where that is the case, BPI supports the Bureau’s approach. Other parts of the proposed rule, however, depart from these guiding principles. In those instances, BPI encourages the Bureau to reconsider the proposed rule and recommends changes designed to better meet the objectives of section 1071. Accordingly, BPI respectfully requests that the Bureau revise the proposed rule as discussed in this letter.

To read the full comment letter, please click here.

[1] The Bank Policy Institute is a nonpartisan public policy, research and advocacy group, representing the nation’s leading banks and their customers. Our members include universal banks, regional banks and the major foreign banks doing business in the United States. Collectively, they employ almost 2 million Americans, make nearly half of the nation’s small business loans, and are an engine for financial innovation and economic growth.

[2] Small Business Lending Data Collection Under the Equal Credit Opportunity Act (Regulation B), 86 Fed. Reg. 56356 (Oct. 8, 2021).