The Section 1071 data collection and reporting requirements will be a big lift for covered institutions. Even with preparation and training, there will inevitably be additional challenges and questions that arise once lenders actually start collecting the data. The CFPB anticipated this and included a provision in the Final Rule that allows institutions to “practice” prior to the effective date. Section 1002.114(c)(1) states that …
A financial institution…is permitted, but not required, to collect information regarding whether an applicant for a covered credit transaction is a minority-owned business and/or a women-owned business…and the ethnicity, race, and sex of the applicant’s principal owners…beginning 12 months prior to the compliance date… A financial institution collecting such information… must do so in accordance with the requirements…
In other words, institutions that will be subject to the rule as of January 1, 2028, may start collecting “restricted data” (i.e., business ownership status and the ethnicity, race and sex of a small business applicant’s principal owners) as early as January 1, 2027. Institutions can practice collecting other “non-restricted” information at any time.
Published 2026/11/11