Credit union trade groups have strongly opposed rule related to data collection on women- and minority-owned small businesses.
The Consumer Financial Protection Bureau (CFPB) intends to issue by the end of March, 2023 a final rule requiring credit unions and banks to collect data regarding applications for credit from women-owned and minority-owned small businesses, the agency said in court documents filed earlier this month.
Credit union and other financial services trade groups have vehemently opposed that effort. Republican lawmakers have attempted to delay or kill the rule, but have not succeeded.
The agency announcement came as part of the settlement of a lawsuit filed by the California Reinvestment Coalition. The coalition had filed suit in U.S. District Court for the Northern District of California, accusing the agency of dragging its feet in issuing the rule, which is required under the Dodd-Frank Act. The rule has been known as Section 1071—the part of Dodd-Frank that requires it.
When the bureau issued a proposed rule last year, it totaled 918 pages and attracted more than 2,100 comments.
Resistance From Credit Union Groups
Financial trade groups contend that the rule would pose a tremendous regulatory burden and credit union organizations in particular have argued that they face unique problems and that credit unions should therefore be exempt.
Those groups argue that credit unions cannot make an unlimited number of business loans since they are subject to the Member Business Loan Cap and, further, face limits based on their fields of membership.
They have also said the cost of implementing the rule will be so high that smaller credit unions may stop making business loans entirely.