Small LENDER Act

This Act may be cited as the “Small Lenders Exempt from New Data and Excessive Reporting Act” or the “Small LENDER Act”.

Section 704B of the Equal Credit Opportunity Act (15 U.S.C. 1691c–2) is amended—

(1) in subsection (c)—

(A) by striking “Any applicant” and inserting the following:

“(1) In general.— Any applicant”; and

(B) by striking the period at the end and inserting the following:

“(A) the Bureau of Consumer Financial Protection requires the financial institution to ask, collect, and report such information to the Federal Government annually pursuant to this section;

(B) the applicant is not required to provide such information; and

(C) the applicant’s response will not affect the financial institution’s evaluation of the request for credit.

(2) Model form.— The Director of the Bureau of Consumer Financial Protection shall establish a model form to be used in providing the information required to be provided to an applicant under paragraph (1). Such form shall—

(A) be in plain English; and

(B) to the extent practicable, be no longer than a single page.”;

(2) by striking subsection (d);

(3) by redesignating subsections (e), (f), (g), and (h) as subsections (d), (e), (f), and (g), respectively; and

(4) in subsection (d), as so redesignated—

(A) in paragraph (2)—

(i) by striking subparagraphs (C), (G), and (H);

(ii) by redesignating subparagraphs (D), (E), and (F) as subparagraphs (C), (D), and (E), respectively;

(iii) in subparagraph (D), as so redesignated, by adding “and” at the end; and

(iv) in subparagraph (E), as so redesignated, by striking the semicolon and inserting a period;

(B) in paragraph (3), by striking “paragraph (1)(E)” and inserting “paragraph (1)(D)”; and

(C) by adding at the end the following:

“(5) Prohibition on information not reported by an applicant.— A financial institution may not compile and maintain information described under subsection (b) that was determined by the financial institution using visual observation or any other manner other than being provided by an applicant.”;

(5) in subsection (f), as so redesignated, by adding at the end the following:

“(4) Initial compliance date.—

(A) In general.— The Bureau may not require a financial institution to comply with this section, or any rule issued under this section, until June 1, 2031.

(B) Safe harbor.— The Bureau may not enforce compliance with the requirements of this section during the 2-year period beginning on the date described in subparagraph (A).

(5) Exemption for small financial institutions.— A financial institution is exempt from the requirements of this section if the financial institution—

(A) in each of the 2 previous calendar years, originated less than 2,500 credit transactions for small businesses; or

(B) has less than $10,000,000,000 in assets.

(6) Treatment of response rate.— The percentage of applicants providing a financial institution with the information described under subsection (b) may not be used as a factor in determining whether a financial institution is in compliance with the requirements under this section.”; and

(6) in subsection (g), as so redesignated, by striking paragraph (2) and inserting the following:

“(2) Small business.— The term small business means any entity with gross annual revenues of $1,000,000 or less in the most recently completed fiscal year.”.