Washington, D.C.— A coalition of public interest and advocacy organizations recently urged the Consumer Financial Protection Bureau (CFPB) to expand the data collection and reporting requirements under its proposed rule to implement changes to Section 1071 of the Dodd-Frank Wall Street Reform and Protection Act. The CFPB’s proposal would expand the data collection and reporting requirements in the small business lending market to include women-owned and minority-owned small businesses.
The Center for Responsible Lending (CRL), the National Association of Latino Community Asset Builders (NALCAB), and the National Coalition for Asian Pacific American Community Development (National CAPCACD), along with eleven undersigned public interest groups submitted a letter to the CFPB Thursday night.
“As the Bureau stated in the proposed rule, ‘it is not possible with current data to confidently answer basic questions regarding the state of small business lending’ and this ‘limitation is especially the case with regard to the race, sex, and ethnicity of small business owners,’” the letter stated. “Without application-level, lender-level data about the characteristics of the applicant, the credit sought, and the action taken on the application (including both decisions to approve or deny and pricing decisions) it is not possible to begin to identify fair lending violations or, at least, fair-lending concerns that warrant further investigation.”
The groups support the Bureau’s decision to include Merchant Cash Advances as a covered transaction within scope of the rule, as well as their proposal to disaggregate racial and ethnic categories to uncover disparities within the broader groupings. They also recommend requiring lenders to report business owners’ personal credit scores when deciding to make or establish the terms of a loan. Download full document.
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Press Contact: Vincenza Previte vincenza.previte@responsiblelending.org