November 13, 2025
Today, the Consumer Financial Protection Bureau published in the Federal Register a dramatically scaled-back 1071 small business data collection rule, kicking off a public comment period that ends on December 15, 2025.
The 198-page proposed rule, signed by acting CFPB Director Russell Vought, excludes a wide range of products, including "merchant cash advances, small-dollar business credit and all agricultural lending," from reporting requirements. Additionally, financial institutions would have a longer timeline to comply with the rule with new compliance deadlines set for January 1, 2028.
Legal challenges to the 1071 rule remain ongoing in three jurisdictions, including a lawsuit brought by the Revenue Based Finance Coalition in the U.S. District Court for the Southern District of Florida, challenging the prior characterization of so-called "MCAs" as credit. The CFPB's newest proposed 1071 rule carves out "MCAs," explaining that "MCAs are structured differently from traditional lending products; traditional lending concepts like 'interest rate' do not fit the way that MCAs are priced."
The CFPB also proposes excluding any business credit transaction in an amount of $1,000 or less, to be adjusted for inflation over time. In addition, the proposed rule reduces the gross annual revenue threshold for a "small business" from $5 million or less to $1 million or less. The CFPB explains that a $1 million threshold would help reduce regulatory burden on financial institutions.
Prior Alerts:
CFPB Sets New Compliance Dates for Small Business Lending Rule
CFPB Issues Final Small Business Lending Rule