BRENTWOOD, Tenn.—One person is predicting a lawsuit related to Section 1071 of the Dodd Frank Act could “flip the script on small business lending data.”

Section 1071 of the Dodd Frank Act requires financial institutions to collect and report data on small business loan applications to the Consumer Financial Protection Bureau (CFPB). Credit unions have opposed the data collection rule.

In a post on LinkedIn, Stephanie Lyon, an attorney who is SVP-compliance at Ncontracts, wrote that “In a twist of events, some of the same advocacy groups that initially pressured the CFPB to create the Section 1071 rule are now suing them for attempting to abandon it.”

‘Violates Federal Law’
Noting the CFPB delayed earliest compliance dates into 2026 and has also said it has no plans to enforce the rule, the plaintiffs in the case against the CFPB said not doing so violates federal law, according to Lyon.

“If they win, we could see compliance dates snap back way earlier than 2026. Think months, not years,” wrote Lyon in her post.

According to Lyon, the smart compliance strategy is—while everyone’s “debating whether Section 1071 is dead”—for institutions to quietly maintaining their readiness. 

Avoiding an ‘Oops’

“Because nothing says ‘oops’ quite like scrambling to rebuild a compliance program you just dismantled,” Lyon observed. “Sometimes the best compliance strategy is just staying ready.”