Federal Regulator Enacts New 888-Page Law Covering Small Business Finance

This is NOT an April Fool’s joke. On Thursday, the CFPB released the final rules that govern how small business finance companies will have to collect and report data to the federal government. Such rules had been anticipated since the Dodd-Frank Act, passed in 2010, mandated that they be put in place. Thirteen long years later, the only part that may come as unexpected is the sheer magnitude of the language, 888 pages of fine print.

Transactions within the scope of the rule include loans, lines of credit, credit cards, merchant cash advances, and credit products used for agricultural purposes.

According to the CFPB’s executive summary, compliance appears to start next year.

• A financial institution must begin collecting data and otherwise complying with the final rule on October 1, 2024 if it originated at least 2,500 covered originations in both 2022 and 2023.
• A financial institution must begin collecting data and otherwise complying with the final rule on April 1, 2025 if it: Originated at least 500 covered originations in both 2022 and 2023; Did not originate 2,500 or more covered originations in both 2022 and 2023; and Originated at least 100 covered originations in 2024.
• A financial institution must begin collecting data and otherwise complying with the final rule on January 1, 2026 if it originated at least 100 covered originations in both 2024 and 2025.

Call your lawyer.