House committee passes bill to exempt small banks from certain reporting requirements

The House Financial Services Committee passed a bill that would exempt small banks and lenders from reporting requirements under the Small LENDER Act.

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The Small LENDER Act (H.R. 1806) would codify “financial institution” as one that originates at least 500 covered transactions in each of the last two years, as opposed to the 25-transaction threshold proposed in the Consumer Financial Protection Bureau’s notice of proposed rulemaking (NPRM).

Further, the bill codifies “small business” as one with gross annual revenues of $1 million or less in the last year instead of $5 million or less as defined in the NPRM. Finally, the bill extends the effective compliance date with the final rule to be three years after publication in the Federal Register plus a two-year grace period, as opposed to the 18-month implementation period in the NPRM.

A bill introduced in the House by Rep. French Hill (R-AR) would exempt mall banks from these requirements.

“Small businesses are the lifeblood of our nation’s economy. With small lenders often driving investment in their local communities, it is crucial that small businesses have access to the capital they need to prosper. The CFPB’s 1071 rule hurts small businesses by making credit more expensive and disproportionately impacts smaller companies. My bill makes necessary changes to exempt community banks and lenders from having to comply with the CFPB’s harmful small business data collection regulation because of President Biden’s veto to repeal Section 1071 of Dodd-Frank. I applaud the Small LENDER Act’s passage through the House Financial Services Committee and am pleased that my bill is one step closer to reaching the House Floor,” Hill said.

The passage by the committee clears the way for the bill to head to the full House for a vote.