House Panel Advances Section 1071 Exemption Bill

04/22/26

The House Financial Services Committee has advanced legislation that would significantly scale back small-business lending data requirements under Section 1071 of the Dodd-Frank Act-marking a meaningful step forward on issues the Ohio Bankers League has been actively working since the rule was first proposed and finalized. The bill, the Small Lender Act (H.R. 941) led by Chairman French Hill, would narrow both who is subject to the rule and which loans are covered-two core changes OBL has consistently advocated for.

Section 1071, implemented by the Consumer Financial Protection Bureau, requires banks to collect and report detailed data on small-business credit applications, including information tied to women- and minority-owned businesses. From the outset, OBL has raised concerns that the rule, as written, would impose disproportionate compliance burdens on community banks while creating real challenges around data collection, customer privacy, and the ability to deliver relationship-based lending. In response, we have consistently pushed for targeted statutory changes-specifically advocating for a meaningful small-lender exemption and a narrower definition of which businesses should be included. Section 1071 is effectively on hold today, with no current compliance obligation, and regulators are working toward a revised rule that would push implementation to 2028 and significantly narrow its scope.

The legislation approved by the committee reflects those priorities. It would exempt lenders originating fewer than 2,500 small-business loans in each of the previous two years, as well as institutions under $10 billion in assets-relief that would apply to a significant portion of OBL's membership. Just as importantly, the bill would refocus the rule on truly small businesses by lowering the revenue threshold from $5 million to $1 million. Both provisions align directly with the changes OBL has supported since the earliest stages of the 1071 rulemaking process, recognizing that a one-size-fits-all approach does not work for institutions serving local markets and relationship-driven borrowers.

For Ohio banks, this is a constructive development that would ease compliance strain while preserving access to credit for small businesses across the state. By reducing unnecessary reporting requirements and narrowing the scope of covered loans, the proposal would allow banks to continue meeting the needs of their communities without diverting resources into complex data infrastructure that offers limited practical benefit. OBL will continue to engage as the bill moves through Congress with the goal being to exempt as many OBL member banks as possible before the compliance deadlines go into effect.