CFPB Simplifies Small Business Loan Rules for Fairer Access
Published Date: 11/12/2025
Proposed Rule
Summary
The CFPB is updating rules for small business loans to make things simpler and fairer for lenders and borrowers. These changes affect banks and lenders by redefining which loans count and what info they must collect, aiming to improve data quality. Comments on the proposal are open until December 15, 2025, so get ready to weigh in!
Analyzed Economic Effects
9 provisions identified: 7 benefits, 1 costs, 1 mixed.
Merchant Cash Advances Excluded
The CFPB proposes to exclude merchant cash advances (MCAs) from the definition of covered credit transactions. An MCA is defined as a lump-sum payment in exchange for a share of future sales or income up to a ceiling amount; excluding MCAs means those transactions would not be part of the section 1071 data collection.
Agricultural Lending Carved Out
The CFPB proposes to exclude agricultural lending from covered credit transactions. The proposed definition covers loans to fund crop, livestock, and related capital purchases, meaning agricultural loans would not be required to be reported under section 1071 during the initial data-collection phase.
FCS Excluded; Origination Threshold Raised
The CFPB proposes to exclude Farm Credit System (FCS) lenders from coverage and to raise the institution origination threshold from 100 to 1,000 covered credit transactions for each of two consecutive years. Institutions below that higher threshold would not be covered by the rule.
Small Business Definition Tightened
The CFPB proposes to change the rule's gross annual revenue threshold for a small business from $5 million or less to $1 million or less. This means only businesses with $1,000,000 or less in gross annual revenue would be the primary focus of the initial data collection.
Several Discretionary Data Fields Removed
The CFPB proposes removing several discretionary data points from required reporting, including application method, application recipient, denial reasons, pricing information, and number of workers. The agency intends to focus initial data collection on statutory data points identified in section 1071.
Compliance Date Pushed to 2028-01-01
The CFPB proposes to extend the rule's compliance date to January 1, 2028 for all financial institutions that remain covered under the rule. The Bureau also intends to maintain the grace period and align it with the new compliance date if finalized.
Very Small Loans Exempted ($1,000)
The CFPB proposes to exclude small dollar business credit of $1,000 or less (with that threshold to be adjusted for inflation) from coverage. Loans at or below this $1,000 threshold would not be required to be reported under the rule.
Demographic Data Aligned With E.O. Format
The CFPB proposes changes to how it collects demographic data about principal owners and business ownership status to comply with Executive Order 14168, which directs use of a male/female binary for sex and removal of questions about gender identity. The format of ownership-status and principal-owner demographic data would be modified accordingly.
Time/Manner Rules and Applicant Rights Emphasized
The CFPB proposes to change provisions on the time and manner of data collection by removing certain non-statutory requirements and adding an emphasis for applicants on their statutory rights under the rule. These changes aim to simplify collection practices and make applicants aware of their rights.
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Key Dates
Department and Agencies
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Previous / Next Documents
Previous: 2025-19864 — Equal Credit Opportunity Act (Regulation B)
The Consumer Financial Protection Bureau is updating rules to make sure everyone gets a fair shot at credit, no matter who they are. These changes clarify how lenders should avoid unfair treatment and support special credit programs. If you want to share your thoughts, you’ve got until December 15, 2025, to speak up!
Next: 2025-19882 — Perfluoroalkyl and Polyfluoroalkyl Substances (PFAS) Data Reporting and Recordkeeping Under the Toxic Substances Control Act (TSCA); Revision to Regulation
The EPA is updating rules for companies that make or import PFAS chemicals, asking them to report certain info about these substances from 2011-2022. The changes add some smart exceptions to ease reporting on things companies probably don’t know, saving time and hassle. Comments on the proposal are open until late December 2025, so affected businesses should get ready to weigh in!
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