CFPB Proposed Rule Focuses on Small Business Access to Credit

The Consumer Financial Protection Bureau on Wednesday proposed a new rule aimed at increasing transparency in the small business lending marketplace.

The proposed rule, mandated by Congress in the Dodd-Frank Act, would, if finalized, require lenders to disclose information about their lending to small businesses. Under the proposal, lenders would be required to report the amount and type of small business credit applied for and extended, demographic information about small business credit applicants and key elements of the price of the credit offered.

The Mortgage Bankers Association said the proposed rule could create a substantial reporting burden for lenders, including commercial and multifamily lenders, something akin to Home Mortgage Disclosure Act reporting. MBA Associate Vice President Bruce Oliver said the definition of “small business” and how it applies in the commercial real estate lending context will be an important element of the rule.

CFPB Acting Director Dave Uejio said the proposed rule would allow community organizations, researchers, lenders and others to better support small business and community development needs.

“Small businesses are the primary job creators and wealth builders in communities across the country,” Uejio said. “After homeownership, small business ownership is the primary means by which families and communities build wealth. Yet too often, small business development is starved for want of access to responsible, fairly priced credit. Today, we are proposing a rule that would help us all learn how small enterprises fare when trying to access financing, and what barriers are holding them back from further prosperity.

The Bureau said data collected under the proposed rule would assist it and other stakeholders to identify and address difficulties small businesses experience in trying to access credit and how current lending practices can be improved. Policymakers, community groups, investors and bankers could use the data to design more effective small business and community development programs across the nation. Additionally, the CFPB and other government agencies can use the data to aid their ongoing fair lending, supervisory and enforcement efforts.

The CFPB notice of proposed rulemaking will have a 90-day comment period following its publication in the Federal Register. MBA will deliver comments during this time; MBA will also cover operational and implementation issues in the commercial lending context.

Additionally, MBA will schedule a series of working sessions to identify and develop issues and solutions and review draft comments. For more information, contact Oliver at or 202-557-2840.

The proposed rule can be accessed at

The CFPB also launched a web portal for small business entrepreneurs to share their stories about applying for credit, which will help the CFPB understand small business entrepreneurs’ challenges and successes in accessing credit.