Section 1071 Small Business Lending Data Collection: Requirements & Compliance

Section 1071: Small Business Lending Data Collection Requirements

Last updated: January 14, 2026

Bank loan officer collecting Section 1071 small business lending data

Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act creates the most significant new lending data collection requirement since HMDA was expanded in 2018. Covered financial institutions must collect, maintain, and report data on credit applications from small businesses, including demographic information about principal owners.

The rule aims to:

Facilitate fair lending enforcement by providing regulators with data to identify potential discrimination in small business lending
Enable communities to identify business and community development needs for small businesses, including women-owned and minority-owned businesses
Promote transparency in the small business credit market

Who Must Comply?

Financial institutions that originated at least 100 covered credit transactions to small businesses in each of the two preceding calendar years must comply. This includes banks, credit unions, online lenders, CDFIs, and other non-depository lenders.

The CFPB has established a phased compliance timeline:

Tier 1 (2,500+ originations): Compliance required by July 2025
Tier 2 (500-2,499 originations): Compliance required by January 2026
Tier 3 (100-499 originations): Compliance required by October 2026

What Data Must Be Collected?

Section 1071 requires collecting and reporting 81+ data points for each covered application, significantly more complex than HMDA reporting. Key categories include:

Application Information

Unique identifier and application date
Application method (online, in-person, telephone, mail)
Application recipient (direct to institution or via broker/agent)
Credit type (term loan, line of credit, credit card, merchant cash advance, etc.)
Credit purpose (working capital, equipment, real estate, refinancing, etc.)

Credit Details

Amount applied for and amount approved
Action taken (originated, approved but not accepted, denied, withdrawn, incomplete)
Action taken date and denial reasons (up to 4)
Pricing information (interest rate, fees, charges)

Business Information

Census tract of principal place of business (requires geocoding)
Gross annual revenue of the business
NAICS code (6-digit North American Industry Classification System code)
Number of workers and time in business
Minority-owned, women-owned, and LGBTQI+-owned business status

Principal Owner Demographics

Ethnicity of each principal owner (Hispanic/Latino origin with subcategories)
Race of each principal owner (detailed categories including Asian and Pacific Islander subcategories)
Sex of each principal owner

How Is Section 1071 Different from HMDA?

While compliance officers familiar with HMDA will recognize some concepts, Section 1071 introduces significant new challenges:

Aspect	HMDA Reporting	Section 1071
Scope	✓Residential mortgages only	!All small business credit types
Demographics	✓Can use BISG proxy if not reported	!Must collect directly from applicants
Data Points	✓~48 data fields	!81+ data fields
Business Info	✓Not applicable	!NAICS code, revenue, employees, ownership
Pricing Data	✓Rate spread vs APOR	!Actual interest rate, fees, and charges
Credit Types	✓Closed-end mortgages, HELOCs	!Term loans, lines of credit, cards, MCA, etc.

How Can RATA Associates Help?

RATA has been preparing for Section 1071 since the rule was proposed, building on our 39 years of HMDA/CRA compliance expertise. Comply SBL (1071) provides:

Complete data collection for all 81+ required fields
Compliance-grade geocoding (95%+ accuracy) for business addresses
NAICS code lookup and validation
Built-in edit checking aligned with CFPB validation rules
Demographic data collection forms that meet regulatory requirements
Integration with existing Comply HMDA/CRA for institutions already using our software

Section 1071 Compliance Software

Ready to prepare for Section 1071? Comply SBL (1071) tracks all 81+ data points, handles geocoding and NAICS coding, and generates submission-ready files.

Frequently Asked Questions

What is Section 1071 of the Dodd-Frank Act?

Section 1071 requires covered financial institutions to collect and report data on small business credit applications to the CFPB. It aims to facilitate enforcement of fair lending laws and identify business and community development needs for small businesses, including those owned by women and minorities.

Who must comply with Section 1071 requirements?

Financial institutions that originate at least 100 covered small business credit transactions annually must comply. Compliance is phased: institutions with 2,500+ originations by July 2025, 500+ by January 2026, and 100+ by October 2026.

What data must be collected under Section 1071?

Section 1071 requires 81+ data points including application details, credit type and purpose, amount applied for and approved, pricing information, action taken, denial reasons, census tract, gross annual revenue, NAICS code, time in business, and principal owner demographics (ethnicity, race, and sex).

How is Section 1071 different from HMDA reporting?

While both require geographic and demographic data collection, Section 1071 applies to small business credit (not residential mortgages), requires collecting owner demographics directly from applicants (not using proxies), includes business-specific fields like NAICS codes and revenue, and covers more credit products including lines of credit, credit cards, and merchant cash advances.

Section 1071: Small Business Lending Data Collection