What This Bill Does
This bill changes rules about how banks and lending companies report information about small business loans. It gives lenders more time to follow new reporting rules and creates a period where they must follow the rules but cannot be punished for breaking them.
Who It Affects
Banks, lending companies and other financial institutions that make small business loans. Small businesses that borrow money from these lenders.
Key Provisions
• Financial institutions have 3 years to follow any new reporting rules or guidance created after this bill passes, no matter when the institution started operating (Sec. 2(1)(A))
• After the 3-year period ends, financial institutions get a 2-year period where they must follow the rules but cannot be penalized for failing to do so (Sec. 2(1)(B))
• A financial institution is defined as any organization that makes business loans and originated at least 500 credit transactions for small businesses in each of the two calendar years before the safe harbor period begins (Sec. 2(2)(A))
• A small business is defined as any organization with $1,000,000 or less in total yearly revenue in the most recently completed fiscal year before the safe harbor period begins (Sec. 2(2)(B))
What Changes
The bill changes the Equal Credit Opportunity Act to give lenders extended timelines for complying with new loan data reporting rules and requirements.
Important Definitions
The bill defines "financial institution" as any partnership, company, corporation, association, trust, estate, cooperative or other organization that engages in financial activity. It defines "small business" as any organization making $1,000,000 or less per year.
Effective Date
Not specified in bill text
I
118TH CONGRESS
1ST SESSION H. R. 1806
To amend the Equal Credit Opportunity Act to modify the requirements
associated with small business loan data collection, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 27, 2023
Mr. HILL (for himself, Mr. WILLIAMS of Texas, and Mr. LUETKEMEYER) in-
troduced the following bill; which was referred to the Committee on Fi-
nancial Services
A BILL
To amend the Equal Credit Opportunity Act to modify the
requirements associated with small business loan data
collection, and for other purposes.
Be it enacted by the Senate and House of Representa-
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tives of the United States of America in Congress assembled,
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SECTION 1. SHORT TITLE.
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This Act may be cited as the ‘‘Small Lenders Exempt
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from New Data and Excessive Reporting Act’’ or the
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‘‘Small LENDER Act’’.
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SEC. 2. SMALL BUSINESS LOAN DATA COLLECTION.
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Section 704B of the Equal Credit Opportunity Act
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(15 U.S.C. 1691c–2) is amended—
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•HR 1806 IH
(1) in subsection (g), by adding at the end the
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following:
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‘‘(4) COMPLIANCE.—
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‘‘(A) IN GENERAL.—With respect to any
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rules or guidance issued under this subsection
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on or after the date of the enactment of this
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paragraph, the Bureau shall provide a financial
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institution a 3-year period to comply with such
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rule or guidance, regardless of the date on
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which such financial institution began its oper-
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ations.
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‘‘(B) SAFE HARBOR.—With respect to any
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rules or guidance issued under this subsection
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on or after the date of the enactment of this
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paragraph, beginning on the date after the last
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day of the 3-year period described in subpara-
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graph (A), the Bureau shall provide a 2-year
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safe harbor to financial institutions during
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which each such financial institution is required
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to comply with the rule or guidance but not
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subject to any penalties for failure to comply.’’;
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and
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(2) in subsection (h)—
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(A) by striking paragraph (1) and insert-
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ing the following:
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•HR 1806 IH
‘‘(1) FINANCIAL INSTITUTION.—The term ‘fi-
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nancial institution’ means—
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‘‘(A) any partnership, company, corpora-
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tion, association (incorporated or unincor-
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porated), trust, estate, cooperative organization,
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or other entity that engages in any financial ac-
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tivity; and
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‘‘(B) in each of the two calendar years pre-
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ceding the first day of the safe harbor period
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described in subsection (g)(4)(B), originated
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not less than 500 credit transactions for small
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businesses.’’; and
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(B) by striking paragraph (2) and insert-
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ing the following:
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‘‘(2) SMALL BUSINESS.—The term ‘small busi-
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ness’ means any entity with gross annual revenues
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of $1,000,000 or less in the most recently completed
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fiscal year preceding the first day of the safe harbor
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period described in subsection (g)(4)(B).’’.
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Æ
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