The CFPB has narrowed the section 1071 small business lending rule

Section 1071 is the small business lending data rule in Regulation B. The Bureau's first version was large and contested, and courts "stayed the rule's compliance deadlines for some market participants." On 1 May 2026 the CFPB published a final rule that rewrites much of it (91 FR 23530, amending 12 CFR part 1002).

The new rule took effect on 30 June 2026. Nobody has to collect data yet: "The compliance date for the rule is January 1, 2028." There is also a grace period, which "is now from January 1, 2028, through December 31, 2028."

Who is covered now

The biggest change is the coverage threshold. The Bureau decided "to raise the origination threshold from 100 to 1,000 covered credit transactions for each of two consecutive years." Farm Credit System lenders are now excluded from coverage altogether.

Take a community bank that originated 300 small business loans in each of the last two years. Under the old threshold it was covered. Under the new one it isn't, and it would need to more than triple its volume to come back in.

The definition of a small business has also tightened. The gross annual revenue threshold moves "from $5 million or less to $1 million or less." A business with $3 million in revenue was a small business for 1071 purposes under the old rule and is not under the new one.

What is no longer reported

Some products are now outside the rule. It "excludes merchant cash advances (MCAs), agricultural lending, and small dollar loans." Small dollar means "any transaction in an amount of $1,000 or less, to be adjusted for inflation over time." Commenters asked for a higher cut-off, with suggestions of $2,500 and $5,000, and some went as high as $25,000 or $50,000. The Bureau kept $1,000 as proposed.

For lenders that remain covered, the list of data points is shorter. The rule "removes the discretionary data points for application method, application recipient, denial reasons," as well as "pricing information, and number of workers." The Bureau says it now focuses on the data points that section 1071 itself names, plus the few needed to collect them. It also changes how business ownership status is collected and the format of the demographic questions about a small business's principal owners.

What it could mean

We think this is the end of 1071 as a project for most community banks and credit unions. The question changes from "how do we build this" to "do we still need to watch it." A 1,000-loan threshold over two consecutive years is a high bar. Our guess is that only a small share of institutions under a few billion dollars in assets will clear it, and those that do probably already have the systems and staff to handle it.

If your institution started building for the old rule, it's worth stopping to decide what to keep. Some of that work is useful anyway. A clean record of small business applications, decisions and reasons helps with fair lending self-review and with exam requests. The demographic collection pieces, the firewall planning and the vendor contracts for 1071 reporting probably are not worth finishing if you're now below the threshold.

The two-year test is the part to put on a calendar. Coverage depends on origination counts in consecutive years, so a lender that grows its small business book quickly, or buys one, could cross 1,000 later. In our view a simple annual count, reported to whoever owns the fair lending programme, is enough to catch that well before 2028.

One thing we'd be careful about: dropping out of 1071 is not the same as dropping out of fair lending. This rule is about collecting and reporting data. In our view a lender below the threshold should expect examiners to keep asking how it treats small business applicants, and should keep its own records good enough to answer.

We'd also keep an eye on the courts. The first rule was stayed for some lenders, and this one replaces it with something much smaller. Someone may challenge the narrowing too, though nothing in the notice says so.