The issue has been a contentious one for some time, as the CFPB has delayed making rules on a section of Dodd-Frank that requires the collection of data to determine whether minority- and women-owned businesses have equitable access to funds.
The issue has been pushed by consumer advocates, particularly in light of the lack of available data on whether the Paycheck Protection Program (PPP) loans were distributed fairly, the report says. Advocates claim that the availability of more data would have made the disparity lower.
One section of the outline includes exemptions for reporting data that some smaller banks think is too low, Morning Consult writes.
The outline has three potential thresholds for exemption: banks that make less than 25 loans or $2.5 million, 50 loans or $5 million, or 100 loans or $10 million.
Michael Emancipator, vice president and regulatory counsel for the Independent Community Bankers of America (ICBA), a trade group representing community banks, said there wasn't a need for such low thresholds.
“There’s a little bit more work to be done explaining why exempting banks under these asset thresholds isn’t the appropriate way to go,” Emancipator said, according to Morning Consult. “These exemptions would leave too many community banks subject to the rulemaking.”
According to Emancipator, this kind of reporting would be too time-consuming for smaller banks, and add more compliance costs when things are already stretched for those institutions.
The nature of small business loans is different, too, because they're often specific to one community or location, and bad-faith actors could access private information if too much reporting is done.
Earlier this year, the CFPB sought input on how it might change the rules regarding third-party access to consumers' financial data. Issues like privacy, security and access to important government stimulus funding through the loosening of regulations were all explored.