CFPB Finalizes Revised 1071 Rule

May 23, 2026 - 04:29

On May 1, 2026, the Consumer Financial Protection Bureau published a revised version of its Small Business Data Collection Rule, commonly known as the 1071 Rule, in the Federal Register. The 2026 Final Rule represents a significant overhaul of the original regulation, which was initially designed to enforce Section 1071 of the Dodd-Frank Act. That section requires financial institutions to collect and report data on small business credit applications, including information on the race, sex, and ethnicity of the business owners.

The new rule aims to address concerns raised by both lenders and advocacy groups regarding the original compliance burden and privacy protections. Under the 2026 Final Rule, the CFPB has adjusted the reporting thresholds for covered institutions, exempting smaller lenders from the most detailed data submission requirements. The bureau also narrowed the scope of what constitutes a "small business" for reporting purposes, focusing on firms with gross annual revenue under a specific cap.

the revised rule introduces a phased implementation timeline, giving lenders more time to update their systems and train staff. The CFPB stated that these changes are intended to balance the goal of identifying lending discrimination with the practical realities faced by community banks and credit unions. Critics argue the rollback weakens oversight, while industry groups praised the move as a necessary correction to prevent excessive regulatory strain.