The Consumer Financial Protection Bureau (CFPB) has extended the compliance dates for its small business lending rule in response to court orders. Last year, a federal court in Texas stayed the rule pending a Supreme Court decision, which was handed down in May. As a result, the CFPB was required to extend the rule’s compliance deadlines to make up for the time the rule was stayed, according to a press release issued on Tuesday, June 25th.
The interim final rule issued by the CFPB extends the compliance dates by 290 days, which is the same amount of time that passed between the Texas court’s stay last year and the Supreme Court’s decision last month. The small business lending rule, issued by the CFPB on March 30, 2023, expands the data that lenders must collect when determining who receives business loans. Lenders will now be required to collect and disclose demographic, geographic, and other details about borrowers.
The Supreme Court decision that lifted the stay on the rule was made on May 16, when the court declared that the CFPB’s funding mechanism is constitutional. This decision overturned a previous ruling by a lower court that had put the agency’s existence at risk. According to the new interim final rule issued by the CFPB, lenders will have varying dates by which they must begin collecting data based on the volume of small business loans they handle.
Lenders with the highest volume must start collecting data by July 18, 2025, lenders with moderate volume must do so by January 16, 2026, and lenders with the smallest volume must do so by October 18, 2026. The deadline for reporting small business lending data to the CFPB remains June 1 following the calendar year in which the data is collected. This means that high volume lenders must submit their first data by June 1, 2026, while moderate and low volume lenders must do so by June 1, 2027.
The CFPB also updated its grace period to align with the new compliance dates. The agency stated that it will not penalize lenders for reporting errors during the first 12 months of data collection and will conduct examinations to assist lenders in improving compliance efforts as long as they are making good faith compliance efforts.