CFPB Extends Compliance Deadlines for Small Business Lending Rule

Consumer Financial Protection Bureau (CFPB)

WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) has extended the compliance deadlines for the small business lending rule, following a series of legal proceedings that temporarily halted its implementation. This move comes after a federal court in Texas issued a stay on the rule pending the Supreme Court’s decision in CFPB v. CFSA.

The interim final rule, announced by the CFPB, extends compliance dates by 290 days, a period reflecting the time elapsed since the initial stay was issued last year until the Supreme Court’s ruling last month. This adjustment provides lenders with additional time to prepare for the new requirements.

High-volume lenders are now required to begin collecting data by July 18, 2025. Those with moderate volumes have until January 16, 2026, and the smallest volume lenders have until October 18, 2026. Despite these extensions, the deadline for reporting small business lending data to the CFPB remains June 1 following the calendar year in which the data is collected. Consequently, high-volume lenders will submit their first reports by June 1, 2026, while moderate and low-volume lenders will do so by June 1, 2027.

Lenders have the flexibility to choose their initial compliance date based on their small business loan originations from either 2022 and 2023 or from 2023 and 2024. Moreover, the rule permits lenders to start collecting demographic data up to one year before their compliance date, allowing them to test and refine their procedures and systems.

To support the transition, the CFPB has updated its grace period policy. For the first 12 months of data collection, the bureau will not impose penalties for reporting errors. Instead, it will conduct examinations aimed at helping lenders identify and address compliance weaknesses, provided they demonstrate good faith efforts to comply with the rule.

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Supporting Lenders and Small Businesses through Regulatory Changes

This extension is significant for both lenders and small businesses. For financial institutions, it provides crucial time to adapt their systems and processes to meet new regulatory standards without facing immediate penalties. For small businesses, the rule aims to enhance transparency and fairness in lending practices, potentially improving access to essential financial resources.

The CFPB’s decision aims to balance regulatory enforcement with practical support for compliance. By extending deadlines and offering a grace period, the bureau ensures that lenders can meet new standards without undue hardship, ultimately fostering a more robust and equitable lending environment for small businesses across the United States.

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