Section 1071: Small Business Lending Data Collection Requirements
Last updated: August 14, 2026
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?
These figures were revised by the CFPB's reconsideration final rule published May 1, 2026 (Federal Register document 2026-08494, effective June 30, 2026). Guidance published before that date, including compliance calendars built on the old tiered schedule, is out of date. Use the Section 1071 coverage checker to test where you stand.
Financial institutions that originated at least 1,000 covered credit transactions to small businesses in each of two consecutive years must comply. This includes banks, credit unions, online lenders, CDFIs, and other non-depository lenders. The threshold was raised from 100 by the 2026 rule, a tenfold increase that takes many institutions out of scope entirely.
A small business now means one with gross annual revenue of $1 million or less, down from $5 million. That change cuts both ways: it shrinks the population of applications you would report, and because the origination threshold counts transactions to small businesses, it also shrinks the number you count when testing coverage.
There is now a single compliance date:
- January 1, 2028 for every institution that remains covered. The rule extends the compliance date "for all financial institutions that remain covered by the rule."
- The former Tier 1, Tier 2 and Tier 3 dates, and the intermediate extensions issued during 2025, no longer describe the rule.
What Data Must Be Collected?
Section 1071 requires a substantially larger collection per application than HMDA. The 2026 rule removed the discretionary data points for application method, application recipient, denial reasons, pricing information and number of workers, so any field mapping built against the earlier data dictionary needs re-checking. The categories that remain:
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 | Substantially more, revised in 2026 |
| 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 every field the rule requires
- 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 every required data point, handles geocoding and NAICS coding, and generates submission-ready files.
Tracking Every Data Point by Hand, or Not
Whatever your compliance date, the collection work is the same size. This is what changes about doing it.
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 originated at least 1,000 covered credit transactions to small businesses in each of two consecutive years must comply. A small business is one with gross annual revenue of $1 million or less. Both figures were changed by the CFPB's reconsideration final rule of May 1, 2026, which raised the origination threshold from 100 and lowered the revenue ceiling from $5 million. There is a single compliance date of January 1, 2028 for every institution that remains covered. The tiered phase-in that set separate dates for lenders above 2,500, above 500 and above 100 originations was replaced by the CFPB's reconsideration final rule of May 1, 2026.
What data must be collected under Section 1071?
Section 1071 requires application and credit details, census tract of the principal place of business, gross annual revenue, NAICS code, time in business, and principal owner demographics (ethnicity, race and sex) collected directly from the applicant. The May 2026 reconsideration rule removed the discretionary data points for application method, application recipient, denial reasons, pricing information and number of workers.
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.
