CFPB Finalizes Extended Compliance Dates For Small Business Lending Rule

The CFPB finalized its June 18, 2025, interim final rule on Oct. 2, 2025, amending Regulation B to extend the compliance dates set forth in its small business lending rule (issued in March 2023 to implement Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act) and to make other date-related conforming adjustments. The final rule is effective Dec. 1, 2025 (60 days after publication of this final rule in the Federal Register).

Background

On June 25, 2024, the CFPB issued an interim final rule to extend the rule's compliance dates in accordance with orders issued by the U.S. District Court for the Southern District of Texas. The 2024 interim final rule was published in the Federal Register on July 3, 2024. Challenges filed to the 2023 final rule remain ongoing in three jurisdictions; each of those courts have stayed the rule's compliance deadlines set forth in the 2024 interim final rule for the plaintiffs and intervenors in those cases.

However, compliance dates had not been stayed for those who were not plaintiffs, intervenors or their members in those cases. To facilitate consistent compliance across all covered financial institutions, in the 2025 interim final rule, the CFPB extended the compliance dates set forth in the 2024 interim final rule by approximately one year, and made conforming adjustments.

As the CFPB has noted previously, it intends to initiate a new Section 1071 rulemaking and anticipates issuing a notice of proposed rulemaking "as expeditiously as reasonably possible." According to the CFPB, this extension of the compliance date "should be sufficient to ensure uniformity of compliance dates with the court-ordered stays and for the CFPB to issue a new proposal to reconsider certain aspects of the 2023 final rule." The CFPB "believes that the resolution of this uncertainty and addressing the underlying concerns raised by stakeholders about the 2023 final rule will, in the longer term, result in better data collection."

Although the CFPB determined that the Administrative Procedure Act's good cause exception for not requiring public comment applied to the 2025 interim final rule, the CFPB nevertheless solicited comments. In this final rule, the CFPB confirms its findings in the 2025 interim final rule and "has determined upon a review of comments received that no further changes are necessary, other than the correction of two typographical errors in official commentary identified by commenters." The CFPB received 20 comments in response to the 2025 interim final rule. Most commenters addressed the 2025 interim final rule itself, while other comments addressed provisions of the 2023 final rule not taken up by the 2025 interim final rule.

Compliance Dates

The CFPB finalizes the compliance dates in the 2025 interim final rule, under which covered financial institutions will begin collecting data as follows:

The CFPB states that covered financial institutions are permitted to continue using their small business originations from 2022 and 2023 to determine their compliance tier, or they may instead use their originations from 2023 and 2024 or from 2024 and 2025. In addition, covered financial institutions are permitted to begin collecting protected demographic data required under the 2023 final rule 12 months before their new compliance date, in order to test their procedures and systems. As illustrated above, the deadline for submitting small business lending data will remain June 1 following the calendar year for which data are collected.

Grace Period

Finally, the CFPB updated its grace period policy statement to reflect the revised compliance dates to avoid any doubt as to its intentions regarding a grace period when the rule goes into effect. The CFPB reiterates that the Grace Period Policy Statement as written "already states that examinations will be diagnostic and will help to identify compliance weaknesses, and that the CFPB does not intend to assess penalties with respect to errors in the initial data submissions." Further, the CFPB states that it "expects to work with other regulators to encourage them to adopt similar grace period policy statement." Accordingly, the 12-month grace period provided for in the grace period policy statement described in the 2025 interim final rule remains in effect.

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