On March 30, the Consumer Financial Protection Bureau issued its final rule to implement Section 1071 of the Dodd-Frank Act. Section 1071 amended the Equal Credit Opportunity Act to require financial institutions to collect and report certain data in connection with credit applications made by small businesses, including women- or minority-owned small businesses. … Continue Reading
small business
Small Business Administration to expand 7(a) program to fintechs and alternative lenders
By John Sadler & Justin Kerner on
The Biden Administration recently announced a slate of new public and private sector initiatives aimed at advancing racial equity by delivering “capital and resources to underserved small businesses and the community lenders who serve them.” Among these initiatives was a proposed rule change for the Small Business Administration (SBA) that would increase the number of nonbanks, including Fintechs, eligible to offer SBA 7(a) loans. … Continue Reading
CFPB on track to issue Section 1071 final rule by March 31, 2023
By John L. Culhane, Jr. on
Yesterday, the CFPB filed its tenth status report with the California federal district court hearing the lawsuit brought to force the CFPB to move forward with rulemaking to implement the small business data requirements of Section 1071 of the Dodd-Frank Act. The Bureau states in the status report that it is on track to issue the Section 1071 final rule by March 31, 2023.… Continue Reading
FTC settles Section 5/ROSCA claims alleged against payment processor providing services to small businesses
By Brian Turetsky on
On July 29, the Federal Trade Commission (“FTC”) announced a settlement with First American Payment Systems LP, a Texas-based nationwide payment processor, and two of its sales agent affiliates, Think Point Financial LLC and Eliot Management Group LLC (collectively, “First American”), in an action alleging hidden terms, “surprise” exit fees, and charges made to merchants without their consent. … Continue Reading
CFPB files seventh status report in Section 1071 rulemaking lawsuit
By John L. Culhane, Jr. on
On November 22, 2021, the CFPB filed its seventh status report with the California federal district court hearing the lawsuit brought by the California Reinvestment Coalition, National Association for Latino Community Asset Builders, and two individual plaintiffs in 2019. The purpose of the suit was to force the Bureau to issue a proposal implementing the small business data requirements of Section 1071 of the Dodd-Frank Act of 2010 after years of delay. … Continue Reading
New York amends its Community Reinvestment Act to cover non-bank mortgage lenders; New York DFS issues proposed revisions to CRA regulation to require collection of data by banks on loan applications from minority- and women-owned businesses
By Ballard CFS Group on
Expansion of CRA coverage. On November 1, New York Governor Hochul signed into law amendments (S.5246-A/A.6247-A) to the New York Community Reinvestment Act (NYCRA) that expand the NYCRA’s coverage to non-depository mortgage lenders. The amendments are effective November 1, 2022. New York now joins a small group of states, including Illinois and Massachusetts, that apply CRA-type laws to non-depository mortgage lenders.… Continue Reading
This week’s podcast: A close look at the CFPB’s Section 1071 proposed rule to expand data collection and reporting in the small business lending market: Part I
By Barbara S. Mishkin on
In Part I of this two-part podcast, we examine the CFPB’s proposed rule implementing Sec. 1071 of the Dodd-Frank Act which would impose significant new data collection and reporting requirements on lenders in connection with credit applications made by women- or minority-owned small businesses. After reviewing the history of Sec. 1071 rulemaking (including the lawsuit that prompted the CFPB to act under a court-imposed deadline), we discuss the proposal’s key definitions and data collection requirements (including timing and related procedures and reuse of previously collected data).… Continue Reading
Ballard Spahr webinar explores consumer-like issues arising in small business lending
By Barbara S. Mishkin on
In our recent webinar, “The Consumerization of Small Business Lending: Significant Developments and Trends,” Ballard attorneys were joined by special guest Malini Mithal, Associate Director of the Federal Trade Commission’s Division of Financial Practices. Mark Furletti, Co-Chair of the firm’s Consumer Financial Services Group also participated in the webinar, together with John Socknat, a partner in the CFS Group, and Aileen Ng, an associate in the Group. … Continue Reading
The consumerization of small business lending: Ballard Spahr to hold May 25 webinar with special guest, FTC Associate Director Malini Mithal
By Barbara S. Mishkin on
Federal and state courts, lawmakers, and regulators are increasingly recognizing that, in contrast to large businesses, small businesses often lack the sophistication needed to operate on an equal footing with providers of commercial financing. As a result, there has been a growing body of legislative, regulatory, and enforcement activity on the federal and state levels directed at protecting small businesses from practices that are targeted by consumer protection laws.… Continue Reading
CFPB files another status report in Section 1071 lawsuit
The CFPB has filed its fourth status report with the California federal district court as required by the Stipulated Settlement Agreement in the lawsuit filed against the Bureau in May 2019 alleging wrongful delay in adopting regulations to implement Section 1071 of the Dodd-Frank Act.
Section 1071 amended the ECOA to require financial institutions to collect and report certain data in connection with credit applications made by women- or minority-owned businesses and small businesses. … Continue Reading