A complete substitute amendment. V2 fundamentally restructures the compliance framework for small business lending data collection, introducing new applicant protections, explicit exemptions for small financial institutions, and a revised compliance timeline. It also removes certain data points and privacy provisions from the original act, making it effectively a different bill from v1.
Small LENDER Act
- Sponsor
- Rep. Hill, J. French [R-AR-2]
- Committees
- Financial Services Committee (primary)
- Last action
- Jun 18, 2026
Bottom line
The bill substantially scales back and delays the implementation of small business lending data collection requirements under ECOA, aiming to reduce compliance burdens for financial institutions, particularly smaller ones.
What it actually does
This bill amends the Equal Credit Opportunity Act (ECOA) to significantly modify and delay data collection requirements for small business lending. It establishes a new effective date of June 1, 2031, for compliance with these rules, provides a two-year safe harbor period from enforcement, and exempts small financial institutions based on transaction volume or asset size. Additionally, it restricts the types of data financial institutions can collect and maintain, and redefines 'small business' for the purpose of these rules.
Proponents argue
Proponents argue that the bill alleviates excessive regulatory compliance costs for small financial institutions, enabling them to dedicate more resources to lending to small businesses rather than to complex data collection. They contend that the current or proposed data collection rules are overly burdensome, disproportionately affecting smaller lenders and potentially stifling credit availability. The delayed implementation and safe harbor provisions offer crucial time for institutions to adapt.
Opponents contend
Opponents would likely argue that this bill undermines critical efforts to identify and combat discriminatory lending practices against small businesses, especially those owned by women and minorities. They would assert that comprehensive data collection is essential for transparency, accountability, and ensuring equitable access to credit, and that delaying or exempting institutions from these rules could allow systemic biases to persist undetected.
The bill is concise and its core changes are clearly articulated, making it accessible for a quick yet informed review by interested parties.
Section 2(1) of H.R. 941, amending Section 704B(c) of ECOA
Enhanced Applicant Disclosure and Model Form Requirement
This provision mandates that financial institutions, when requesting demographic data from small business loan applicants, must inform them in writing that the data collection is required by the CFPB, that providing the information is optional, and that their response will not impact their credit application. It also directs the CFPB Director to create a plain English, single-page model form for this disclosure.
Supporters argue
Supporters argue this provision enhances transparency for applicants, ensuring they are fully aware of their rights and the purpose of data collection, which could foster trust and potentially increase voluntary participation while safeguarding privacy.
Critics contend
Critics might contend that explicitly emphasizing the optional nature and non-impact on credit decisions could inadvertently lower applicant response rates, thereby diminishing the overall effectiveness of the data collection for its intended purpose of identifying discrimination.
Tradeoffs
This provision balances the need for applicant privacy and informed consent with the objective of collecting comprehensive data for fair lending analysis.
Section 2(2), 2(3), and 2(4) of H.R. 941, amending Section 704B(d) of ECOA
Removal of Certain Data Collection Requirements and Prohibition on Inferred Data
This provision strikes the original subsection (d) of ECOA Section 704B and redesignates subsequent subsections. It further amends the new subsection (d) by removing specific data points (C, G, H) from collection requirements. Crucially, it adds a new prohibition preventing financial institutions from compiling or maintaining information described under subsection (b) if it was determined by visual observation or any other method other than being directly provided by an applicant.
Section 2(5) of H.R. 941, adding paragraph (4) to Section 704B(f) of ECOA
Delayed Compliance Date and Temporary Safe Harbor
This provision prohibits the Bureau of Consumer Financial Protection (CFPB) from requiring financial institutions to comply with the small business lending data collection rules until June 1, 2031. Furthermore, it establishes a two-year safe harbor period, beginning on June 1, 2031, during which the CFPB cannot enforce compliance with these requirements.
Section 2(5) of H.R. 941, adding paragraph (5) to Section 704B(f) of ECOA
Exemption for Small Financial Institutions
This provision exempts certain financial institutions from the small business lending data collection requirements. An institution is exempt if, in each of the two previous calendar years, it originated less than 2,500 credit transactions for small businesses OR has less than $10,000,000,000 in assets.
Section 2(5) of H.R. 941, adding paragraph (6) to Section 704B(f) of ECOA
Prohibition on Using Response Rate as Compliance Factor
This provision explicitly states that the percentage of applicants who provide demographic information to a financial institution cannot be used as a factor in determining whether that institution is in compliance with the small business lending data collection requirements.
Section 2(6) of H.R. 941, amending paragraph (2) of Section 704B(g) of ECOA
Redefinition of 'Small Business'
This provision redefines the term 'small business' for the purposes of ECOA Section 704B to mean any entity with gross annual revenues of $1,000,000 or less in the most recently completed fiscal year.
The bill strikes an entire subsection (d) and specific data collection categories (subparagraphs (C), (G), and (H)) from the redesignated subsection (d)(2) of ECOA Section 704B. Without the original text of 15 U.S.C. 1691c-2, the precise content of what is being removed is not immediately apparent.
Section 2(2) and 2(4)(A) of H.R. 941
Why it matters:This is standard legislative practice for amending existing statutes by reference. It is not necessarily evasive, but it requires external reference for a complete understanding of the changes.
Case for: Supporters would argue that these removed data points were either overly burdensome to collect, redundant, or not essential for the core purpose of identifying discrimination, thus streamlining the process and reducing compliance costs for financial institutions.
Case against: Opponents would contend that removing specific data points reduces the granularity and comprehensiveness of the collected information, potentially making it harder to detect subtle forms of discrimination or to understand the full landscape of small business lending.
Estimated impact: This action reduces the scope of data collected by financial institutions, impacting the breadth and depth of regulatory analysis for fair lending.
The bill redefines 'small business' for the purposes of ECOA Section 704B to mean any entity with gross annual revenues of $1,000,000 or less in the most recently completed fiscal year. This is a significant change from the previous definition, which was likely higher (e.g., $5 million or $25 million based on typical SBA definitions or the CFPB's original rule).
Section 2(6) of H.R. 941
Why it matters:This is a standard way to amend definitions in a statute, often placed at the end of a section. While technically not hidden, its profound impact on the scope of the entire data collection scheme could be easily overlooked by a reader unfamiliar with the prior legal context.
Case for: Proponents would argue that focusing data collection on the smallest businesses (under $1 million revenue) targets the most vulnerable segment and significantly reduces the overall compliance burden for lenders by narrowing the scope of businesses for which data must be collected.
Case against: Opponents would argue that this significantly shrinks the universe of businesses covered by fair lending data collection, leaving a large segment of small businesses (those between $1 million and the previous threshold) without the benefit of this oversight, potentially allowing discrimination against them to go unaddressed.
Estimated impact: This change substantially reduces the number of businesses for which data is collected, thereby limiting the comprehensiveness of fair lending analysis and potentially masking disparities for businesses above the new threshold.