CFPB Implements New Rule to Monitor Small Business Lending Bias

The Consumer Financial Protection Bureau (CFPB) has finalized a rule requiring lenders to collect and report information about small business credit applications they receive, including geographic and demographic data, lending decisions, and the price of credit. The rule will work in concert with the Community Reinvestment Act to increase transparency in small business lending, promote economic development, and combat unlawful discrimination. The increased transparency will benefit small businesses, family farms, financial institutions, and the broader economy. The rule will cover diverse forms of credit by all types of lenders, including non-depository financial institutions, and will provide a comprehensive view of small business lending. The rule will phase in implementation for the largest lenders first, and lenders with strong records of service will be given extra time to comply.