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The CFPB section 1071 effective date

Mary Ellen Biery
May 30, 2023
Read Time: 0 min

Timelines for small business loan data collection and reporting

Deadlines for complying with the new CFPB section 1071 rule requirements for financial institutions to collect data on small business loan activities.

You might also like this one-page summary of key dates and deadlines for complying with the 1071 rule.


Final rule

Effective dates & compliance dates for rule 1071

As they do with any new requirement, financial institutions want to know when the CFPB 1071 rule is effective and when they must begin collecting and reporting data on their small business lending activities.  

The effective date of the Consumer Financial Protection Bureau’s (CFPB) new rule is 90 days after the final version was published in the Federal Register (i.e., June 28, 2023, based on the Code of Federal Regulations and the March 30 publication). However, compliance deadlines for affected financial institutions are tiered so that small business lenders originating the most transactions begin reporting data earlier than less active small business lenders. Oct. 1, 2024, is the earliest compliance deadline.

Despite the seemingly long runway to prepare, it's not too early to get a handle on the new requirements and how they will affect a bank or credit union. With the changes, many financial institutions face the most significant data collection and reporting effort in nearly 50 years. Given this scope, lenders need to begin assessing now how and when they will comply. At Abrigo’s recent ThinkBIG conference, hundreds of bank and credit union staff members attended information sessions on the issue. They learned tips for capturing small business loan data, storing it, and reporting it to the CFPB to comply with the required timelines.

Below are details on important dates for 1071 compliance and what the changes involve.

Which FIs must comply

Section 1071 deadlines are rooted in CFPB goals.

Before discussing 1071 compliance dates, it’s helpful to understand the rule’s goals and which financial institutions it affects.

The final rule implements section 1071 of the Dodd-Frank Act by amending the Equal Credit Opportunity Act (ECOA), or Regulation B. The CFPB small business lending regulations are being included as subpart B of Reg B and aim to support and enforce the fair lending requirements. CFPB intends the data collected by lenders on each small business credit application to shed light on potential disparate treatment in loan terms, especially related to minority-owned small business applicants, including women-owned small businesses. Reporting on the data is also expected to help identify small business owners’ needs and credit opportunities. A CFPB compliance aid lists 81 data fields for information lenders must collect and report.

Which lenders are counted as “covered financial institutions”? The rule outlines that any company or organization engaged in lending activities is covered.

Would you like to stay up to date on CFPB 1071 implementation?

This means that in addition to banks and credit unions, other lenders subject to the rule’s mandates are finance companies, online lenders, Community Development Financial Institutions (CDFIs), government lenders, and nonprofit lenders.

Originations in 2022 and 2023

CFPB 1071 deadlines are split into tiers

Each reporting tier and its associated deadline is determined by the number of covered transactions to small businesses that a lender originated in both 2022 and 2023.

In fact, a company or organization must have originated at least 100 covered credit transactions in 2022 and 100 in 2023 to fall under the rule’s requirements at all (i.e., be considered a “covered financial institution”) once the rule is effective.

What is a covered transaction? The CFPB generally describes it as a request for any of the following:

  • Loans
  • Lines of credit
  • Credit cards
  • Merchant cash advances
  • Credit products used for agricultural purposes

Requests for additional credit on an existing loan are not counted as originations for the purpose of determining a covered financial institution.

What is an application?

For data collection and reporting, financial institutions must track applications they receive for covered transactions, as opposed to solely tracking originations. What is an application under the CFPB 1071 rule? It is an oral or written request for a covered credit transaction that is made following the procedures used by a financial institution for the type of credit requested. This means that lenders must track data not only related to approved and booked credit but also applications that are any of the following:

  • Withdrawn
  • Incomplete
  • Denied
  • Approved by the lender but not accepted by the applicant

A re-evaluation, extension, or renewal request on an existing business account is excluded from the definition of covered applications as long as the request seeks no additional credit. Inquiries and prequalification requests are also excluded.

How a lender defines an application as incomplete or withdrawn can vary from financial institution to institution, noted Abrigo Senior Advisor Paula King, CPA, who is already working with financial institutions to plan for and prepare 1071 reporting.

The CFPB “has left it up to financial institutions as to where you feel the cutoff is for an incomplete application” or a withdrawn application, she said. Regardless of how the bank or credit union defines these application resolutions, the lender should spell it out in the loan policy, King added. Loan policies should also clarify how a counteroffer by the lender will be treated.

Transactions excluded from 1071

Several types of transactions are excluded from the CFPB’s requirements to report on applications. Among those considered excluded transactions:

  • Letters of credit
  • Trade credit (i.e., financing arrangements such as accounts receivable with a business providing goods or services)
  • Public utilities credit
  • Securities credit 
  • Incidental credit defined in Regulation B as exempt (e.g., not payable in more than four installments; not subject to finance charge)
  • Factoring 
  • Leases
  • Consumer-designated credit used for business/ag purposes, such as taking out a home equity line of credit or charging business expenses on their personal credit cards
  • Purchases of originated covered credit transactions 
  • Applications with potential HMDA and section 1071 overlap: CFPB does not require reporting under section 1071 (transactions would only be reportable under HMDA)

A final component of the rule that is useful in understanding the various deadlines for 1071 reporting is the CFPB’s description of what constitutes a small business. An applicant or borrower is considered a small business if it is a business (including agricultural) that had $5 million or less in gross annual revenue for its preceding fiscal year before applying.

Earliest deadline is 2024

Three deadlines for CFPB 1071 rule compliance

The earliest reporters are those that have originated at least 2,500 small business loans covered by the rule in 2022 and at least 2,500 in 2023. These financial institutions must begin data collection in October 2024 and continue through the end of the year. The data collected between October and December 2024 needs to be reported by June 1, 2025. During 2025, this type of institution needs to collect data for the entire year and report it by June 1, 2026. For following years, lenders must collect data for the full year and report it by the following June 1. 

A one-page summary of the various collection and reporting deadlines can help with tracking 1071 compliance.

The second tier of deadlines covers financial institutions with at least 500 covered originations each year during 2022 and 2023. This group of small business lenders must begin collecting data on Jan. 1, 2025, and they must report data collected for the entire 2025 year by June 1, 2026.

The last group of lenders required to collect and report data on small business loan applications are financial institutions with at least 100 covered originations each year during 2022 and 2023. These banks, credit unions, and other lenders have to begin collecting data on Jan. 1, 2026, and they are required to collect the information for the entire year. This 2026 data needs to be reported to the CFPB by June 1, 2027.

The CFPB has produced an info sheet with more details and examples of when financial institutions must begin collecting data and complying with the small business lending rule. In this document, the bureau notes that if an institution determines it’s not required to comply with the rule in 2024, 2025, or 2026, it must nevertheless determine in subsequent years whether it must, based on whether it originates at least 100 covered originations in each of the two calendar years immediately preceding the year in question.

We can help you navigate 1071 deadlines and compliance. In addition to our 1071 resource page for lenders, which has updated information to help prepare for the new requirements, Abrigo’s Loan Origination Software will have all required data fields in a borrower-facing collection form, access to pre-built reports, and the ability to export for CFPB reporting. Your financial institution can comply with 1071 while streamlining the origination process and ongoing customer management while working with a trusted partner of 2,400 institutions. Talk to a specialist to learn more.

You might also like this checklist to help prepare for implementing the 1071 rule: "CFPB 1071 rule: Checklist for compliance success."

About the Author

Mary Ellen Biery

Senior Strategist & Content Manager
Mary Ellen Biery is Senior Strategist & Content Manager at Abrigo, where she works with advisors and other experts to develop whitepapers, original research, and other resources that help financial institutions drive growth and manage risk. A former equities reporter for Dow Jones Newswires whose work has been published in

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Abrigo enables U.S. financial institutions to support their communities through technology that fights financial crime, grows loans and deposits, and optimizes risk. Abrigo's platform centralizes the institution's data, creates a digital user experience, ensures compliance, and delivers efficiency for scale and profitable growth.

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