What This Bill Does
This bill changes rules for small business loan reporting by financial institutions. It gives banks and lenders more time to follow new data collection rules that apply to small business loans.
Who It Affects
Financial institutions (banks, companies, partnerships and similar organizations that make loans) that originate at least 500 small business loans per year.
Key Provisions
• Financial institutions have a 3-year period to comply with any new rules or guidance about small business loan data collection, regardless of when they started operating (Sec. 2(g)(4)(A))
• After the 3-year compliance period ends, financial institutions enter a 2-year "safe harbor" period where they must follow the rules but cannot be penalized for not following them (Sec. 2(g)(4)(B))
• A "financial institution" for purposes of this law includes any partnership, company, corporation, association, trust, estate, cooperative organization or other entity that engages in financial activity (Sec. 2(h)(1))
• A "small business" is defined as any entity with gross annual revenues of not more than $1,000,000 in the most recently completed fiscal year before the safe harbor period begins (Sec. 2(h)(2))
What Changes
Financial institutions reporting on small business loans now receive a guaranteed 3-year transition period before new rules take effect, followed by an additional 2-year period where penalties do not apply.
Important Definitions
Financial institution: Any partnership, company, corporation, association, trust, estate, cooperative organization or other entity that engages in financial activity and originated at least 500 small business loans in the previous 2 calendar years
Small business: Any entity with gross annual revenues not exceeding $1,000,000 in the most recently completed fiscal year before the safe harbor period
Effective Date
Not specified in bill text
II
118TH CONGRESS
1ST SESSION
S. 1159
To amend the Equal Credit Opportunity Act to modify the requirements
associated with small business loan data collection, and for other purposes.
IN THE SENATE OF THE UNITED STATES
MARCH 30, 2023
Mr. BOOZMAN (for himself, Mr. DAINES, Ms. LUMMIS, Mr. CRAMER, Mr.
GRASSLEY, and Mr. KENNEDY) introduced the following bill; which was
read twice and referred to the Committee on Banking, Housing, and
Urban Affairs
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-
1
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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•S 1159 IS
(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 enactment of this para-
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graph, the Bureau shall provide a financial in-
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stitution a 3-year period to comply with that
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rule or guidance, regardless of the date on
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which that financial institution began the oper-
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ations of the financial institution.
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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 enactment of this para-
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graph, beginning on the date after the last day
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of the 3-year period described in subparagraph
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(A), the Bureau shall provide a 2-year safe har-
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bor to financial institutions during which each
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such financial institution shall be required to
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comply with the rule or guidance but shall not
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be subject to any penalties for failure to com-
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ply.’’; 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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•S 1159 IS
‘‘(1) FINANCIAL INSTITUTION.—The term ‘fi-
1
nancial institution’ means any partnership, com-
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pany, corporation, association (incorporated or unin-
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corporated), trust, estate, cooperative organization,
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or other entity that—
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‘‘(A) engages in any financial activity; and
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‘‘(B) in each of the 2 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 not more than $1,000,000 in the most recently
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completed fiscal year preceding the first day of the
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safe
harbor
period
described
in
subsection
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(g)(4)(B).’’.
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Æ
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