The Consumer Financial Protection Bureau sent a letter to banks on Friday notifying them that they do not yet have to comply with a Dodd-Frank requirement that mandates data collection on credit applications by women and minorities.
The Dodd-Frank law requires financial institutions to collect and report information to the CFPB on credit applications made by women- and minority-owned businesses and small businesses. Leonard Kennedy, the CFPB's general counsel, notified institutions that the section does not become effective until the CFPB issues guidance on how to record and store such data.
"In light of inquiries we have received regarding the timing of financial institutions' obligations under section 1071, we have reviewed the statutory text, purpose and legislative history and conclude that their obligations, including for information collection and reporting, do not arise until the bureau issues implementing regulations and those regulations take effect," Kennedy wrote. "Given the sensitivity of the data at issue, we believe Congress intended that the bureau first provide guidance regarding appropriate procedures, information safeguards and privacy protections. Waiting to commence information collection until implementing regulations are in place will also ensure that data is collected in a consistent, standardized fashion that allows for sound analysis by the bureau and other users of the data."
