In a key regulatory update, the Consumer Financial Protection Bureau (CFPB) has issued an interim final rule extending the compliance deadlines for its Section 1071 small business lending data collection rule by approximately one year. The extension, announced in June 2025, offers temporary relief to financial institutions covered under the rule — but it is not a reason to pause preparation.
The delay stems from ongoing litigation involving the rule’s implementation. In response, the CFPB is allowing additional time for affected institutions to establish systems and protocols for data collection and reporting as required under Section 1071 of the Equal Credit Opportunity Act (ECOA).
A Quick Recap: What Is Section 1071?
Section 1071 of the Dodd-Frank Act mandates that financial institutions collect and report demographic and other key data on small business loan applications. The goal is to promote transparency in small business lending and help identify potential discrimination or disparities in access to credit.
The data to be collected includes, but is not limited to:
a) Applicant’s race, ethnicity, and gender
b) Type and purpose of credit requested
c) Business size and ownership structure
d) Pricing and underwriting information
The rule is aimed at improving accountability in the small business lending space and providing clearer insight into how minority-, women-, and veteran-owned businesses access credit across the country.
What the Extension Means
The new interim final rule provides institutions with roughly one additional year to comply. The exact new compliance dates vary based on institutional size and loan volume, but the general timeline now stretches into 2026 for most covered lenders.
Originally, the first compliance date was set for October 1, 2024. Under the new schedule:
a) Larger lenders (originating 2,500+ small business loans annually) must comply by October 1, 2025
b) Mid-sized lenders (500–2,499 loans annually) by April 1, 2026
c) Smaller lenders (100–499 loans annually) by January 1, 2027
This phased approach gives institutions time to build or enhance data systems, train staff, and ensure compliance procedures are in place.
Why It’s Still Urgent
While the extension offers welcome breathing room, it should not be mistaken for a rollback or repeal. The rule remains in force, and institutions will still be required to report once the deadlines arrive.
Regulatory experts caution that delaying implementation work could lead to rushed compliance, operational disruption, or errors in reporting. Institutions are advised to continue — or even accelerate — their planning, including:
a) Assessing existing systems for collecting required data
b) Designing clear customer disclosures and intake procedures
c) Training loan officers and frontline staff
d) Establishing protocols for data integrity and audit readiness
Those that wait until late 2025 to start preparing may find themselves behind schedule.
The Litigation Context
The compliance delay is directly tied to litigation challenging the CFPB’s rulemaking authority. Several industry groups have raised constitutional concerns regarding the agency’s funding structure, with cases making their way through the courts.
While the legal questions are still being resolved, the CFPB has chosen to extend the compliance timeline to avoid confusion and reduce the burden on lenders preparing under uncertain circumstances. However, there is no indication that the rule itself will be scrapped or materially changed at this stage.
Industry Implications
The extended timeline may affect a variety of stakeholders:
a) Banks and credit unions now have additional time to implement systems without compromising other operational priorities.
b) Fintech lenders — many of which are newer to regulatory compliance at this level — may find this extension especially valuable for building scalable infrastructure.
c) Small business advocacy groups may use this period to educate business owners on their rights and prepare them for new application disclosures they’ll encounter in the future.
Ultimately, the rule is expected to result in the largest database of small business credit applications in U.S. history. For lenders, this means increased scrutiny — but also an opportunity to demonstrate fair lending practices and improve access to credit for underserved businesses.
Final Thoughts
The CFPB’s decision to extend Section 1071 compliance deadlines is a pragmatic step in light of ongoing legal challenges. But it should be seen as a grace period, not a green light to delay.
Financial institutions — especially those originating higher volumes of small business credit — should continue to press forward with system development, compliance planning, and training initiatives. When the new deadlines arrive, preparation will be the difference between a smooth rollout and regulatory risk.
