Failure To Exempt Community Banks In Final 1071 Reporting Rule Raises Significant Privacy Concerns

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Washington, D.C. (Mar. 30, 2023) — Independent Community Bankers of America (ICBA) President and CEO Rebeca Romero Rainey issued the following statement on the Consumer Financial Protection Bureau’s final rule implementing data collection and reporting requirements for small-business loans.

Community Banks Are Frustrated With The CFPB

“ICBA and the nation’s community banks are deeply frustrated that the CFPB has finalized a rule that will require community banks to burden millions of their small business customers with invasive questions about their business and livelihood.

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With the finalization of this rule, the Bureau has dramatically exceeded the clear letter of the law and is requiring community banks to collect numerous intrusive data points beyond what Congress mandated, ignoring the concerns we have voiced about data privacy for these small businesses.

As relationship bankers, community banks look at each small-business loan individually and often in customized terms based on many factors. The CFPB’s rigid data collection requirements will hamper the ability of community banks to tailor loans to meet the unique needs of local businesses.

“Not only will these data reporting requirements place a significant compliance burden on small community banks, but this final rule does not address the significant concerns ICBA has raised about the privacy of applicants, particularly in smaller communities.

The CFPB’s rule will make it possible for loan applicants to be identified, especially in rural areas — potentially driving small-business owners away from community banks and local communities while having a chilling effect on small-business lending.


“The CFPB should use its authority to exempt more community banks and small businesses from its rule and limit mandatory data points to those required by statute. Restricting access to credit in local communities during this critical economic period will ultimately harm the borrowers the CFPB is trying to help — women-owned, minority-owned, and small businesses.

If nothing else, we urge the Bureau to stay the effective date of this rule until the Supreme Court has had an opportunity to weigh in on the constitutionality of the Bureau’s funding structure.”

About ICBA

The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. ICBA is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education, and high-quality products and services.