CFPB Proposes Section 1071 Revisions to Streamline Small Business Lending Data Collection

The CFPB’s November 13, 2025 Section 1071 revised proposal focuses on narrowing covered credit, raising reporting thresholds, redefining small business eligibility, eliminating several data fields, and setting a uniform compliance date of January 1, 2028.

What did the CFPB propose on November 13, 2025?

On November 13, 2025, the Consumer Financial Protection Bureau (CFPB) proposed revisions to Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The goal is to refine and streamline small business lending data collection under Regulation B.

These proposed updates mark a significant shift in how financial institutions, lenders, and creditors will collect, report, and manage small business credit data. This may impact compliance teams, and fair lending oversight.

Key Takeaways

These takeaways summarize the largest operational changes that financial institutions will need to prepare for under the revised rule:

• New compliance date set for January 1, 2028
• Applies to financial institutions and lenders with 1,000+ covered small-business transactions
  Simplifies definitions and reporting obligations
• Continues promoting fair access to credit

Comparison Table: Original 1071 Rule vs. Proposed Revision (2025)

Background: What Is Section 1071?

Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires lenders to collect and report data on small-business credit applications. The goal is to promote fair access to credit and identify potential barriers or disparities in lending.

This section operates under Regulation B, part of the Equal Credit Opportunity Act (ECOA), which prohibits credit discrimination. Section 1071 data helps regulators and the public assess whether small businesses, including those owned by women and minorities, have equitable access to financing.

What are five key changes proposed in the revised 1071 rule?

1. Narrower Covered Credit Transactions: The revised 1071 proposal would focus reporting on traditional business loans, lines of credit, and credit cards. It would exclude products like sales-based financing, loans for agricultural purposes, and small dollar loans. This narrower scope is intended to simplify compliance and align data collection with the products most central to small business credit markets.
2. Increased Coverage Threshold: Under the proposed rule, only financial institutions that originated 1,000 or more covered small business credit transactions in each of the two preceding calendar years would be required to report.This higher threshold is designed to limit the rule’s reach to larger and more active lenders, reducing regulatory burden on smaller institutions.
3. Redefined Definition of “Small Business: The CFPB proposes defining a “small business” as one with gross annual revenue of $1 million or less. This update modernizes the definition, simplifies alignment with Small Business Administration (SBA) and other federal size standards, and provides greater clarity for financial institutions.
4. Data Field and Process Cuts: The Bureau would remove several discretionary data fields, including application method and recipient, denial reasons, pricing, and number of workers. Additionally, LGBTQI+ and gender identity questions would be removed due to privacy and policy concerns. The proposal also deletes language prohibiting discouragement of applicants from providing demographic data.
5. Revised Timing and Publication of Data: The proposed rule establishes a uniform compliance date of January 1, 2028 for all covered institutions. Data collected in 2028 would need to be submitted by June 1, 2029. However, the Bureau has not specified when collected data will be published, or how it will be made publicly available. The CFPB also cautioned that regulators should not rely solely on Section 1071 data when making fair-lending or enforcement decisions.

Implications for Financial Institutions

The CFPB’s proposed revisions to Section 1071 seek to balance fair lending goals with operational efficiency. While the proposal narrows the reporting scope, it underscores the Bureau’s continued commitment to transparency and equitable credit access in small business lending.

Impact for Mergers & Acquisition Activity

As merger and acquisition activity accelerates across the financial sector, institutions exploring strategic combinations must also account for the compliance implications embedded in the CFPB’s proposed rule. The rule makes clear that reporting obligations for the calendar year of a merger hinge on the coverage status of the institutions involved, and it outlines several illustrative scenarios demonstrating how obligations carry through periods of structural change. While the specifics vary depending on whether the merging entities were previously covered, the overarching principle is consistent: a merger does not erase or retroactively alter reporting responsibilities, and institutions must be prepared to maintain continuity in their data collection and reporting practices throughout the transition. For organizations evaluating growth opportunities, understanding these requirements early in the M&A process is essential—not only to ensure compliance, but to manage integration timelines and operational expectations in a rapidly evolving regulatory environment.

What Happens Next

• Industry comment period
• CFPB final rule
• Industry transition period
• Uniform compliance date on January 1, 2028

Register for RiskExec’s 1071 Webinar

Want to learn more about these proposed 1071 changes? Register here for RiskExec’s upcoming webinar titled “1071 Update: Rethink, Refocus, and Realign” on Dec 10th from 1-1:30PM ET.

Conclusion: Balancing Fair Lending and Compliance Simplification

The CFPB’s proposed Section 1071 revisions represent an effort to balance fair-lending transparency with operational efficiency. By refining definitions, reducing complexity, and narrowing scope, the Bureau seeks to maintain equitable access to credit while easing compliance burdens for lenders.

Frequently Asked Questions

What is Section 1071?

Section 1071 requires lenders to collect and report on small-business lending data to ensure fair and equal access to credit.

When will the new Section 1071 rule take effect?

The uniform compliance date is proposed as January 1, 2028.

Who is affected by the CFPB’s 1071 revised proposal?

Financial institutions originating over 1,000 small-business credit transactions annually would be required to comply with 1071.

What is Regulation B?

Regulation B enforces the Equal Credit Opportunity Act (ECOA), ensuring that credit applicants are treated fairly regardless of personal characteristics.