New CFPB Rule Promotes Fair and Competitive Access to Credit for Small Businesses
Washington, D.C. — In response to the Consumer Financial Protection Bureau’s unveiling of a final rule addressing Small Business Lending Data Collection, the American Economic Liberties Project released the following statement.
“Today, by implementing Section 1071 of Dodd-Frank, the CFPB is ensuring that enforcers can fully administer fair lending laws to protect Americans and their businesses from discrimination in financial markets,” said Morgan Harper, Director of Policy and Advocacy at the American Economic Liberties Project. “Fostering transparency in small business lending will also help ensure that small businesses, which form the backbone of the American economy, can more freely and fairly access affordable credit, and allow communities to better evaluate whether their financial institutions are serving the needs and opportunities of all small businesses, including women- and minority-owned enterprises.”
The final rule implements Section 1071 of the Dodd-Frank Act of 2010, which directed the CFPB to create regulations to enable the gathering of small business lending data. Section 1071 was intended to help facilitate the enforcement of fair lending laws like the Equal Credit Opportunity Act, which makes discrimination in any aspect of a credit transaction illegal, banning lenders from considering the race, national origin, religion, sex, marital status, or disability of those applying for credit. Section 1071 was also intended to create transparency in small business lending markets, fostering fair competition and increasing credit access and affordability. The CFPB’s final rule follows a public comment period initiated by a Notice of Proposed Rulemaking issued by the CFPB in September 2021, and allows participants to decline the collection of their data.
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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.