# Plain Language Summary of the Small LENDER Act

This bill makes it easier for smaller banks and lending companies to follow new government rules about collecting data on small business loans. Right now, when the government creates new reporting requirements for lenders, those lenders have to start following the rules pretty quickly. This bill gives them more time and protection from penalties while they get their systems in place.

Specifically, the bill creates a two-step process. First, when the government issues new data collection rules, lenders get three full years to figure out how to comply—so they have time to update their computer systems and train their staff. Then, after those three years are up, there's an additional two-year "safe harbor" period where lenders must follow the new rules but won't face any fines or penalties if they mess up while they're getting the hang of things. This applies to banks and lending companies that originated at least 500 small business loans in each of the two years before the safe harbor period starts, and it only applies to loans for businesses making $1 million or less annually.

The bill's supporters argue this helps smaller lenders avoid getting crushed by compliance costs and penalties while they adapt to new requirements. Critics might worry that it could delay important consumer protections or make it harder to catch discrimination in lending. Either way, the practical effect is that smaller lenders get more breathing room when new reporting rules come down from regulators.

Small LENDER Act

Hill, J. French

Small Lenders Exempt from New Data and Excessive Reporting Act or the Small LENDER Act This bill exempts certain financial institutions and transactions from the Consumer Financial Protection Bureau (CFPB) reporting requirements with respect to data about small business credit applications. Under the bill, the requirements apply only to financial institutions that originate at least 500 credit transactions to small businesses in each of the preceding two years. The bill further defines small businesses as those with annual revenue of $1 million or less. Currently, the CFPB has proposed a rule that the requirements apply only to financial institutions that originate at least 25 annual credit transactions to small businesses in each of the preceding two years. The rule further defines small businesses as those with annual revenue of $5 million or less.