The regulatory landscape surrounding Section 1071 continues to evolve rapidly amid ongoing legal proceedings and shifting enforcement priorities. Financial institutions must maintain proactive monitoring to stay informed and prepared for compliance requirements that remain in flux.
Here are the latest updates on Section 1071 implementation and broader Consumer Protection Bureau (CFPB) oversight.
Table of Contents
- 1071 Status and Legal Developments
- Legislative Efforts to Modify or Repeal 1071
- Strategic Compliance Considerations
- Ncontracts' Implementation Support
What's the status of 1071 and any legal updates?
Update: July 23, 2025
A coalition including Rise Economy, the National Community Reinvestment Coalition, Main Street Alliance, and an Iowa small business owner filed suit challenging the CFPB's decision to delay and abandon enforcement of Section 1071. The plaintiffs argue the agency violated federal law by:- Extending compliance dates without public input
- Announcing non-enforcement intentions
- Abandoning legal obligations to collect and publish small business lending data
If successful, this lawsuit could reinstate earlier compliance dates. The litigation runs concurrently with existing challenges in Texas, Kentucky, and Florida, which have stayed the rule for now. Resolution could take months, though interim court orders remain possible.
1071 compliance timeline
The CFPB's June interim final rule established new compliance deadlines:- Tier 1 (2,500+ transactions): Collect data by July 1, 2026 → File by June 1, 2027
- Tier 2 (500+ transactions): Collect data by January 1, 2027 → File by June 1, 2028
- Tier 3 (100+ transactions): Collect data by October 1, 2027 → File by June 1, 2028
Please note: These dates are currently paused (for some) pending Texas Court of Appeals litigation and may be accelerated if the new lawsuit succeeds.
CFPB enforcement posture
Since April, the CFPB has officially deprioritized enforcement and supervision actions for entities not covered by existing court stays, creating uniform non-enforcement across the industry while litigation continues.
Will there be any more legislative efforts to delay or stop 1071?
Two Congressional bills introduced in February could significantly impact Section 1071:
H.R. 976: 1071 Repeal to Protect Small Business Lending Act
- Complete repeal of demographic and application data collection requirements
H.R. 941: Small LENDER Act
- Maintains underlying data requirements
- Provides three-year transition period plus two-year enforcement grace period for qualifying small-business lenders
How should financial institutions plan to comply with 1071?
Core vs. Enhanced Requirements
While regulatory uncertainty persists, institutions should distinguish between statutory mandates that will survive any rule revision and regulatory additions that may be modified or eliminated:
Statutorily Required (Will Remain Unless Congress Acts)
- Business demographic status inquiry (women-owned, minority-owned, small business)
- Core application data (number, date, type, purpose, amounts, action taken)
- Geographic data (census tract)
- Financial data (gross annual revenue)
- Principal owner demographics (race, sex, ethnicity)
- Firewall protections for demographic data
- Annual Bureau reporting
- 3-year record retention
- Public data availability
Regulatory Additions (May Change)
- LGBTQI+-owned business status
- Comprehensive pricing details
- 100-transaction institutional threshold
- Extensive transaction exclusions
- Enhanced procedural requirements
- Safe harbor provisions
Recommended Approach
Rather than dismantling compliance programs entirely, institutions should:- Preserve foundational data collection capabilities for statutory minimums,
- Streamline application processes to efficiently capture required information,
- Maintain flexibility to adapt to changing requirements, and
- Avoid complete program elimination that would require costly re-implementation.
The statutory foundation of Section 1071 remains unchanged regardless of regulatory modifications, making strategic infrastructure preservation the most prudent approach.
How can Ncontracts help financial institution lenders get ready for 1071?
Staying updated on 1071 changes is critical. Ncontracts will continue to closely monitor Section 1071 developments and deliver real-time updates, expert analysis, and actionable guidance through our compliance management platform, Ncomply — helping your institution stay ahead of changes and confidently manage compliance.
N1071 Solution Components
Our offerings allow you to focus on meeting statuary requirements:- Governance Framework: Customizable model policies and procedures
- Data Management: Software for data transmission and analysis
- Regulatory Intelligence: Built-in updates, enforcement actions, and guidance
- Training Platform: Unlimited user access with video modules and knowledge assessments
- Implementation Support: Remote training and setup assistance
Our innovation team also continuously adapts tools to maintain compliance readiness as requirements evolve.
Related: Financial Services Enforcement Action Tracker | Ncontracts
Key takeaways: Preparing for 1071
While the regulatory landscape remains uncertain, the underlying statutory requirements of Section 1071 provide a stable foundation for compliance planning. Institutions that maintain core data collection capabilities and streamlined processes will be best positioned to adapt efficiently to whatever final requirements emerge from ongoing litigation and potential regulatory revisions.
Looking for more 1071 information? Visit our 1071 Resource Page.
Subscribe to the Nsight Blog
August 2023 Regulatory Brief: Enforcement Actions and the Future of the CFPB & 1071
Regulatory Brief for June 2024: 1071, CFPB News and Enforcement Actions
