LEGAL UPDATE: On November 12, 2025, the CFPB issued a proposed rule which, if finalized, will make substantial revisions to the ECOA small business lending rule. This proposal would narrow the scope of institutions and loans subject to the rule, the number small businesses subject to the rule, the number of data fields to be collected, and would propose a new universal effective data for all lenders of January 1, 2028. Finastra is continuing to monitor this proposal, as well as the ongoing litigation challenging the CFPB's original 1071 rule and will make updates to its SBDC solution as necessary.

Benefits

Finastra's 1071 solution provides answers to the rule's complexity

Finastra's comprehensive solution will give you confidence that you will meet the exacting requirements of the 1071 rule, no matter your institution's size or loan volume

Data collection

Finastra's solution efficiently collects required data from your small business customers through an intuitive and user-friendly interface.

Data accuracy

Data collected in the Finastra user interface is automatically validated using the CFPB’s warning and error validations, helping maintain an efficient data cleaning process.

Data submission

Generate required annual data submissions to the CFPB in the prescribed format using a simple automated process.

Data re-use

Save time and inconvenience to your customers by automatically searching for and using reusable data as permitted under the Equal Credit Opportunity Act (ECOA).

What the 1071 small business lending rule means

The Consumer Financial Protection Bureau (CFPB) has published the rule addressing Section 1071 of the 2010 Dodd-Frank Act (DFA), which places extensive disclosure, data collection, data reporting, and data firewall requirements on financial institutions for certain transactions made to small businesses. The 1071 small business lending rule is designed to assist the CFPB in bringing fair lending to small business lending, and to enable the identification of business and community development needs and opportunities for women-owned, LGBTQI+-owned, and minority-owned small businesses.

This long-awaited final rule amending the Equal Credit Opportunity Act’s (ECOA) implementing Regulation B will have wide-ranging impacts on commercial small business lenders and the time to start preparing for it is now.

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Highlights

The aims of 1071

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Fair lending practice

By requiring financial institutions to collect and report demographic data on small business borrowers, the 1071 small business lending rule will address lending disparities and ensure that all businesses have equal access to credit.

Regulatory compliance

Financial institutions must comply with the 1071 small business lending rule to avoid potential regulatory penalties, which could include fines or other enforcement actions.

Transparency and accountability

The collected data will help regulators and policymakers better understand the lending landscape, identify patterns of discrimination, and develop strategies to promote financial inclusion.

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Types of small businesses to be identified by the 1071 small business lending rule will include:

A business for which more than 50% of its ownership or control is held by one or more women, and more than 50% of its net profits or losses accrue to one or more women.

A business for which one or more LGBTQI+ individuals hold more than 50% of its ownership or control, and for which more than 50% of the net profits or losses accrue to one or more such individuals.

A business for which one or more American Indian or Alaska Native, Asian, Black or African American, Native Hawaiian or Other Pacific Islander, or Hispanic or Latino individuals hold more than 50% of its ownership or control, and for which more than 50% of the net profits or losses accrue to one or more such individuals.

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Compliance is a founding priority of every Finastra Retail Lending product across commercial, consumer, and mortgage software

Finastra LaserPro

A complete loan documentation system for commercial, consumer & mortgage lending.

Product Details

Finastra MortgagebotLOS

All-in-one secure loan origination system that supports retail, wholesale and correspondent mortgage lending

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Additional resources to support your success

Frequently Asked Questions

Equitable accommodations to credit are critical to small business owners and to the future of the US economy. The scale of need is significant. 1071 data will provide the CFPB information about lending to small businesses in order to assist in enforcing fair lending laws, and to enable creditors to identify and support the business needs of small businesses owned by women, LGBTQI+, and other minorities within the community.

Finastra’s 1071 and Originate solutions are integrated to intuitively automate the process of identifying applicants who are subject to 1071 and begin the data collection process. The solution leverages Originate’s best-in-class digital application experience and provides firewall protection between applicants’ sensitive data and loan decision-makers.

Rule 1071 seeks to enhance fair lending to women- and minority-owned businesses and the scale of the need is vast. For example: 41% of non-employer businesses are owned by women, 1.4 million businesses are LGBTQ+ owned, and 37% of all non-employer businesses are owned by minority populations.

Sources:

https://www.census.gov/programs-surveys/abs/data/nesd.html

https://www.sba.gov/blog/mentorship-matters-small-businesses-across-america-demonstrated-sba-score-2022-results

The small business lending rule applies an institutional coverage test that subjects financial institutions to mandatory collection and reporting requirements if they originated at least 100 covered credit transactions for small businesses in each of the two previous calendar years. This covers depository institutions, online lenders, platform lenders, community development financial institutions (CDFIs), lenders involved in equipment and vehicle financing (both captive financing and independent financing companies), commercial finance companies, government lending entities, and nonprofit non-depository lenders.

Data must be collected and aggregated for each annual calendar year and reported to the CFPB by June 1 of the following year.

Let's talk about 1071 and compliance

Learn more about 1071 and sign up to receive notifications and publications to assist your compliance journey. We can also share how Finastra's compliance-guaranteed LaserPro product suite can ensure your loan documents meet both state and Federal requirements.

Collecting small business lending data under Section 1071 is a critical step toward ensuring fair access to credit.

Martin Gruenberg
Chairman FDIC