Trump CFPB’s Small Business Data Rewrite Exposes Lender Rifts

Trump’s CFPB is proposing to sharply narrow the Biden-era small business lending data rule under Dodd‑Frank Section 1071, and that rollback is splitting the lender community into camps. Large trade groups and many banks welcome the changes as overdue relief, while some fintechs and community development–oriented lenders warn the rewrite could undermine fair‑lending transparency and competitive parity.​

What the rewrite does

The proposal would greatly reduce how many lenders and products are covered, raising the reporting threshold from 100 to 1,000 small‑business credit transactions over two consecutive years and excluding categories like merchant cash advances, some small‑dollar products, and agricultural lending from counting toward coverage. It also pares back data fields from the Biden rule’s expanded list toward a much smaller core set, eliminating requirements to collect race, ethnicity, and LGBTQ+ ownership data on business owners that were central to the original fair‑lending transparency goals.​

Industry support

Mainstream banking groups, including those that previously sued over the 2023 rule, have largely praised the Trump CFPB’s move as a “common‑sense” step that cuts compliance costs and complexity, especially for smaller and mid‑size banks. Organizations like the U.S. Chamber of Commerce similarly argue that streamlining the rule removes red tape for local institutions and will make it easier and cheaper to lend to small businesses. Many of these supporters also note the Bureau’s budget strains and say a narrower framework is more realistic to supervise and enforce.​

Lender and advocate pushback

Other lenders and advocacy‑aligned players argue that lifting the coverage threshold and dropping demographic data will erase much of the visibility Congress intended into credit access for women‑, minority‑, and other underserved‑owned firms. Some fintech and mission‑driven lenders worry the rewrite will create uneven obligations across business models, with larger or more data‑driven institutions still subject to detailed reporting while competitors remain largely in the dark. Civil‑rights and small‑business groups are signaling they will press the CFPB to restore stronger demographic and product‑coverage requirements during the comment process.​

Key practical impacts

If finalized, the single compliance date now targeted for January 1, 2028, would give covered lenders a longer runway but would also mean a smaller and less detailed federal dataset on small‑business credit for years to come. Banks and credit unions near the 1,000‑loan cutoff will face strategic decisions about whether to scale up, invest in reporting infrastructure, or remain below the line, while lenders focused on excluded products may effectively exit the federal small‑business data regime entirely. For borrowers and researchers, the rule could leave significant blind spots in understanding how credit flows to the smallest and most disadvantaged businesses, even as it simplifies compliance for much of the industry.​