Chopra pressed on 1071 rule during Senate hearing

Consumer Financial Protection Bureau Director Rohit Chopra faced questions from Congress about the bureau’s Section 1071 small-business data reporting rule.

Lawmaker Questions: During a Senate Banking Committee hearing, Sen. Katie Britt (R-Ala.) raised concerns about the complexity of the rulemaking and its impact on community bank small-business lending and consumer privacy. She asked Chopra whether the CFPB has engaged community banks about their concerns with the rule. “It goes from protecting a consumer to invading their privacy,” she said.

Chopra Response: In response, Chopra said the bureau has met with community bankers and cited the rule’s exemption for smaller lenders, which ICBA has repeatedly said should be expanded. The 1071 rule exempts only financial institutions that originated fewer than 25 covered small-business loans in the two preceding calendar years.

Background: The CFPB’s 1071 rule requires lenders to collect and report data on credit applicants, including the race, sex, and ethnicity of the principal owners as well as gross annual revenue. While the CFPB has the authority to exempt any class of financial institutions from the standards it develops and to limit mandatory data points to those required by the law, it has opted to apply the rule to the vast majority of community banks and to require data points exceeding those required by law.

House Vote Today: With the House set to vote today on a resolution to provide for congressional disapproval of the 1071 rule and dictate that it has no force or effect, ICBA is calling on community bankers to urge their members of Congress to support the measure.