Dive Brief:

• The Consumer Financial Protection Bureau extended by 290 days the compliance deadlines associated with its small-business data collection rule, the agency said Tuesday.
• Lenders that originate 2,500 or more small-business loans per year must begin collecting data by July 18, 2025, the bureau said. Those that originate at least 500 per year must collect data by Jan. 16, 2026. Lenders that originate at least 100 each year must comply by Oct. 18, 2026.
• The CFPB does not intend to assess penalties for reporting errors for the first year of collection as long as lenders engage in good-faith compliance efforts, the bureau said. Additionally, the agency intends to conduct examinations only to help lenders diagnose compliance weaknesses, the CFPB said.

Dive Insight:

The platform to submit small-business lending data to the CFPB will be open for beta testing in August, the agency said.

The deadline for reporting the data to the bureau will be June 1 of the year after data collection begins, the CFPB said. That’s 2026 for the top tier of lenders, and 2027 for the bottom two.

To determine their tier, lenders can either use their small-business loan originations from 2022 and 2023, or from 2023 and 2024, the CFPB said.

The 290-day extension is meant to mirror the amount of time the small-business data collection rule was hung up in court — specifically, from the point at which a U.S. district court judge in Texas partially blocked the rule last July until the Supreme Court last month ruled the CFPB’s funding structure is constitutional.

The rule, mandated under the Dodd-Frank Act, aims to boost transparency of lending details, such as lending decisions, borrowers’ geographic and demographic information, and the price of credit, in an effort to fight unlawful discrimination.

But it has encountered pushback nearly from the moment it was issued in March 2023. A Texas bank and the state’s banking trade group sued the CFPB over the rule less than a month later.

A Texas federal judge exempted members of the suing bank, trade group and American Bankers Association from having to implement the rule — then extended that exemption to lenders nationwide — on the thought that if the Supreme Court were to declare the CFPB’s funding structure unconstitutional, a subsequent judicial action could void the rule entirely.

Meanwhile, the Senate and House each voted last fall to repeal the rule, led by Republicans who contended the data collection would violate privacy and create a paperwork nightmare for lenders. But President Joe Biden vetoed the matter in December.

Under Tuesday’s update, lenders can collect demographic data of borrowers up to a year before their compliance date to test their procedures and systems, the CFPB said.