Maryland Legal Alert for Financial Services
CFPB Finalizes Section 1071 Rule Under Regulation B of ECOA
The Consumer Financial Protection Bureau recently finalized its rule revising Regulation B, which implements the changes to the Equal Credit Opportunity Act (“ECOA”) made by Section 1071 of the Dodd-Frank Act. The revised rule substantially narrows portions of the CFPB’s original 2023 framework, reduces reporting obligations for some lenders, and establishes a new uniform compliance deadline of January 1, 2028.
As discussed in our prior article, the CFPB previously proposed scaling back certain elements of Regulation B in response to industry concerns regarding compliance burden, operational complexity, and implementation challenges. The CFPB’s final rule largely adopts the agency’s proposed revisions and reflects a significant departure from the original 2023 rulemaking.
The revised rule modifies several core aspects of the original Section 1071 framework, including:
- Narrowing the scope of covered financial institutions and covered credit transactions;
- Revising the definition of “small business”;
- Reducing or modifying certain required data points;
- Establishing a single compliance date of January 1, 2028 for covered institutions.
The CFPB stated that the revisions are intended to reduce regulatory burden, improve data quality, and minimize disruption to small business lending markets.
Practice Pointer: Financial institutions should continue reviewing their small business lending programs, data collection practices, and internal procedures to ensure readiness well in advance of the January 1, 2028 compliance deadline. Institutions should also evaluate whether existing loan origination systems, vendor platforms, and compliance management systems can accommodate the revised reporting requirements.
For more information concerning this topic, please contact Tamia J. Morris.
Tamia J. Morris
410-576-4021 • tmorris@gfrlaw.com
Christopher R. Rahl
410-576-4222 • crahl@gfrlaw.com