CFPB Finalizes Revised 1071 Rule

The CFPB has issued a revised final Section 1071 small‑business lending rule that narrows who is covered, trims data points, and pushes the compliance date out to January 1, 2028, while keeping the core 1071 data‑collection mandate intact.

Big‑picture overview

• On May 1, 2026, the CFPB finalized a revised 1071 rule under Regulation B to reconsider and streamline the 2023 small‑business lending rule.

• The Bureau’s stated goals are to reduce operational complexity and burden, improve data quality, and still support fair‑lending oversight and transparency for small‑business credit.

• The new final rule becomes effective around June 30, 2026 (60 days after Federal Register publication), with a single compliance date of January 1, 2028, for all covered institutions.

Who is covered now

• The origination threshold for being a “covered financial institution” jumps from 100 to 1,000 covered credit‑transaction originations in each of two consecutive years.

• This significantly shrinks the population of institutions subject to 1071 reporting, refocusing coverage on higher‑volume small‑business lenders.

• Farm Credit System lenders are expressly excluded from coverage under the revised rule.

What counts as a covered small‑business loan

• The rule continues to apply to applications for credit to “small businesses,” but the definition of small business changes.

• The gross annual revenue cap for a “small business” drops from $\le$ 5 million to $\le$ 1 million, with the intent of targeting truly small enterprises.

• Several products move out of scope: merchant cash advances, agricultural loans, and certain small‑dollar products are excluded from the definition of covered credit transactions.

Scope changes in one view

Data points and operational changes

• The CFPB removes several discretionary (non‑statutory) data fields: application recipient and method, denial reasons, pricing details, and number of workers are no longer required.

• The Bureau also pares back or adjusts how some remaining data points are collected and offers more flexibility around the timing and method of gathering demographic information.

• Despite these cuts, lenders must still collect and report core 1071 data, including information tied to minority‑, women‑ and small‑business ownership, as well as basic application, credit, and business characteristics.

Timeline and transition

• Prior to this rule, the Bureau extended the original tiered compliance dates via interim final rules in 2024 and 2025, with a final extension in October 2025.

• The new revised rule replaces that tiered structure with a single compliance date of January 1, 2028, for all covered institutions, simplifying planning and implementation.

• The Bureau signals that this streamlined structure, coupled with the narrowed scope and reduced data set, is meant to lessen disruption in small‑business credit markets while still meeting the statute’s purposes.