The Consumer Financial Protection Bureau (CFPB) issued a long-anticipated Notice of Proposed Rulemaking (NPRM) revising its data collection rule under Section 1071 of the Dodd-Frank Act. The move marks a significant pivot away from the agency’s previously sweeping approach and signals potential regulatory relief for much of the equipment finance industry.
According to Leigh Lytle, president and CEO of the Equipment Leasing and Finance Association (ELFA), the proposed changes represent “a meaningful step toward providing greater clarity to the industry and developing practical, workable policy.”
“This proposal is clearly a step in the right direction,” Lytle said in a statement, praising the Bureau for prioritizing a rulemaking that aims to balance fair access to credit with manageable compliance burdens.
Key Changes with Major Implications for Equipment Finance
- Higher Exemption Threshold
The CFPB proposes raising the reporting threshold for financial institutions from 100 to 1,000 small-business credit originations per year, a change that could place many equipment finance companies entirely outside the rule’s scope. ELFA welcomed this increase and indicated it will push for an even higher threshold during the public comment period. - Narrower Business Definition
The rule would redefine “small business” as those with $1 million or less in annual revenue, down from $5 million under the 2023 final rule. ELFA called this a “thoughtful definition” and noted its importance for effective implementation. - Streamlined Data Requirements
The Bureau plans to eliminate several discretionary data points — including pricing information, denial reasons, and application method — and focus instead on core metrics required by law. ELFA applauded this “renewed focus on core data points,” noting it will reduce compliance complexity and improve clarity. - Single Compliance Date of January 1, 2028
Unlike the tiered implementation in the prior rule, the CFPB now proposes a single, industry-wide compliance deadline, giving all covered institutions ample time to prepare.
ELFA Urges Continued Engagement
ELFA confirmed it will submit formal comments and policy recommendations, with a focus on ensuring the final rule supports both equitable lending practices and lender efficiency.
In a statement, Lytle emphasized ELFA’s commitment to engaging constructively with the Bureau: “We will be submitting comments and recommendations aimed at ensuring that the final rule both promotes fair access to credit and preserves lenders’ ability to serve small businesses efficiently and effectively.”
The group also noted broader regulatory uncertainty, citing reports that the CFPB’s funding may expire at the end of 2025. While the rule is mandated under Dodd-Frank and will ultimately require implementation, ELFA said it is monitoring how funding questions could impact enforcement timelines or agency oversight.
Industry Takeaway
If finalized, the proposal would substantially narrow the rule’s impact, especially on smaller, independent equipment finance providers, many of whom had voiced concerns about the feasibility of complying with the 2023 rule. By targeting high-volume lenders and streamlining data requirements, the Bureau appears to be course-correcting in response to industry feedback, ongoing litigation and implementation challenges.
ELFA encourages members to stay engaged and share input during the rulemaking process. Questions or comments can be directed to ELFA’s Director of Federal Government Relations, Ally Gale, at agale@elfaonline.org.
