The Impending Impact of Section 1071 and Creeping Consumerism on Equipment Finance

Section 1071 of the Dodd-Frank Act goes beyond consumer lending to regulate business credit. It broadly applies to any entity engaged in financial activity, which may include commercial lessors once the Consumer Financial Protection Bureau publishes proposed regulations scheduled for late 2016. Will you be ready?

One of the lesser known provisions appearing in Title 10 of the 2010 Dodd-Frank Act (DFA) is Section 1071, which imposes data collection requirements similar to those set forth in the Home Mortgage Disclosure Act (HMDA) and Regulation C.¹ However, unlike many DFA requirements that are limited in application to consumer lending, Section 1071 extends to business lending and broadly applies to any entity engaged in financial activity.²

As a result, equipment finance companies can expect to incur significant costs and implement extensive operational changes to their application and underwriting processes in the coming years, under the watchful eye of the Consumer Financial Protection Bureau (CFPB).³