CFPB Halts Enforcement of Small Business Lending Rule Amid Consumer Focus

The Consumer Financial Protection Bureau (CFPB) announced it will deprioritize enforcement and supervision of its small business lending data collection rule, which requires lenders to collect demographic and application data from small business credit applicants. This move comes after court challenges and a stay issued by the Fifth Circuit Court of Appeals, leading the CFPB to avoid enforcing the rule unevenly against entities not covered by the stay. The Bureau cited fairness concerns and a desire to focus resources on more pressing threats to consumers, especially servicemen, veterans, and small businesses. The CFPB has signaled an intention to revisit and potentially revise the rule through new rulemaking. The deprioritization does not extend compliance deadlines or specify further rulemaking details but reflects a broader trend of scaling back previous priorities. Litigation and regulatory updates regarding the rule are expected to continue.