Brad Neighbors, partner in the firm’s Birmingham office and member of the Financial Services practice, recently authored an article discussing the amended Equal Credit Opportunity Act (ECOA). The article was published in the December 2021 issue of Banking Traditions Magazine, and elaborates upon the Dodd-Frank amendment, explaining that financial institutions will be required to collect certain information regarding applications for credit for women-owned, minority-owned and small businesses. This data would then be reported to the Consumer Financial Protection Bureau.
The purpose of this requirement would be to “facilitate enforcement of fair lending laws and enable communities, governmental entities, and creditors to identify business and community development needs and opportunities of women-owned, minority-owned and small businesses.”
Because the comment period for the Notice of Proposed Rulemaking (NPRM will remain open until January 6, 2022, a final rule has not yet been released. With that in mind, the CFPB has proposed that the updated data requirements become effective 90 days after the final rule’s publication in the Final Register, with compliance becoming mandatory 18 months after publication. In the meantime, banks remain able to submit comments to the NPRM with suggestions pertaining to the modified rules that have been proposed.
Brad counsels financial institutions in all aspects of the financial services industry, including regulatory compliance, vendor risk management, corporate governance, mergers and acquisitions, and new bank formation. He has a wide range of financial institution clients, from community banks to large regional banks. He also has clients who are non-bank financial institutions, such as credit unions, finance companies or other businesses that are not typically considered financial institutions but offer in-house financing for their own goods and services.