Small Business

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As previously reported, the CFPB is proposing major changes to its 2023 final rule that would require financial institutions to report information contained in loan applications submitted by small businesses, including women-owned and minority-owned small businesses. The rule is better known as the “Section 1071 rule” after the section of the Dodd-Frank Act that required the CFPB to adopt it.… Continue Reading

The CFPB is proposing major changes to its final rule that would require financial institutions to report information contained in loan applications submitted by small businesses, including women-owned and minority-owned small businesses.

The rule is better known as the “Section 1071 rule” after the section of the Dodd-Frank Act that required the CFPB to adopt it.… Continue Reading

Citing President Trump’s Executive Order, the SBA has sent letters to its network of more than 5,000 lenders instructing them to end what the Trump Administration said is politicized or unlawful debanking.

The SBA is requiring all lenders to stop debanking and reinstate qualified customers who were denied services on the basis of political, religious or ideological beliefs.… Continue Reading

The FTC filed a complaint in the U.S. District Court for the Central District of California against Seek Capital and its CEO, Roy Ferman, alleging that the company operated a bogus business finance scheme that cost small business owners more than $37 million. The FTC alleges violations of the FTC Act, Telemarketing and Consumer Fraud and Abuse Prevention Act, Telemarketing Sales Rule, and Consumer Review Fairness Act of 2016, and requests a temporary, preliminary and permanent injunction, monetary damages and other relief.… Continue Reading

Judge Randy Crane (S.D. Tex) ruled on August 26, 2024 that the CFPB did not exceed its authority under Dodd Frank when it issued its final Section 1071 small business lending rule. The court also rejected other Administrative Procedure Act (APA) challenges to the rule. However, the court did not issue a final judgment as, at that time, the court still had to rule on the two motions filed by certain plaintiff-intervenors: first, to amend their complaint to add a claim based on the illegality of the CFPB being funded by the Federal Reserve Board, when since September, 2022, “the combined earnings of the Federal Reserve System” has been negative and second, for judgment on the pleadings.… Continue Reading

The CFPB announced the availability of its beta platform for the small business lending data collection rule pursuant to section 1071 of the Dodd-Frank Act.

The CFPB has invited financial institutions to test the platform by uploading and using test files provided in the CFPB’s test file repository, or by uploading the financial institution’s own test or sample files.… Continue Reading

In a tentative win for the CFPB, a federal judge in Texas ruled on August 26, 2024, that the agency did not exceed its authority when it issued its final Section 1071 small business lending rule.  The court also rejected other Administrative Procedure Act (APA) challenges to the rule.  However, the court did not issue a final judgment, as it still has to rule on the motion of certain intervenors to amend their complaint to add a claim focused on the legality of the CFPB being funded by the Federal Reserve Board, when since September, 2022, the combined earnings of the Federal Reserve System has been negative.… Continue Reading

On August 16, 2024 the CFPB issued an updated 2025 Small Business Lending Filing Instructions Guide (the “Guide”). The Guide provides updated compliance dates that correspond to the new compliance dates.

As a refresher, the CFPB previously issued an Interim Final Rule extending the compliance dates for the Small Business Lending Rule in light of the Supreme Court’s decision finding the funding structure of the CFPB to be constitutional in CFPB v.… Continue Reading

On August 7, 2024, the U.S. District Court for the Eastern District of Kentucky granted the CFPB’s motion to stay the small business lending rule litigation before the court until resolution of the similar case pending in the Southern District of Texas.

In 2023, a group of Kentucky banks and the Kentucky Bankers Association brought suit against the CFPB challenging the Small Business Lending Rule, which amends Regulation B and creates data collection and reporting requirements pertaining to credit extended to small businesses.… Continue Reading

On June 25th, the CFPB issued an interim final rule with a request for public comment extending the compliance dates for the Small Business Lending Rule in light of the Supreme Court’s decision finding the funding structure of the CFPB to be constitutional in CFPB v. Community Financial Services Association of America (CFSA).… Continue Reading