The CFPB released the interim rule adjusting the mandatory compliance dates on June 25, 2024. As the Bureau had previously stated, the compliance dates are extended by 290 days as a result of the injunction that was ordered in Texas Bankers Assān v. CFPB. The injunction terminated on May 16, 2024 when the Supreme Court issued its decision in Commāy Fin. Servs. Assān of Am. Ltd. v. CFPB.
The new compliance dates, while different from what was originally in the rule, remain the same as the CFPB stated immediately after Community Services was decided: Tier 1 (2500+ loans) lenders are required to comply on July 18, 2025 and report on June 1, 2026. Tier 2 (500+ loans) lenders are required to comply on January 16, 2026 and report on June 1, 2027. Tier 3 (100+ loans) lenders are required to comply on October 18, 2026 and report on June 1, 2027.
On June 1, 2026, Tier 1 institutions with a July 18, 2025 compliance date will only be required to report data for the period of June 18 ā December 31, 2025. Similarly, on their first reporting dates, Tier 2 and 3 banks will only be required to report data for the period from their respective compliance dates through December 31, 2026.
One of the biggest questions banks had about the delays to 1071 implementation was whether the delay would change the years that a bank uses to calculate its tier. The interim rule states that banks may continue to use 2022-23 numbers as provided in the original rule, or they may use their numbers from 2023-24. This is used to determine what the bankās compliance date will be, when it must begin collecting data.
Whether the bank is required to report the data in any given year will still be determined by the loan volume from the two consecutive years prior to the reporting year. The interim rule added several examples in the commentary illustrating how to apply this change to different situations. The way the new dates will apply will vary by institution and require banks to dig into the language of the revised rule with their own specific loan data. Smaller lenders, for example, find their compliance dates determined by their 2024-25 loan volumes. The new comments clarify that a bank originates 100-499 covered loans per year in 2022-23 but under 100 in 2024 or 2025 would not be required to comply with the rule on October 18, 2026 because it would no longer meet the definition of a financial institution in 2026.
The āgrace periodā provision allowing banks to begin collecting data one year prior to their applicable compliance dates remains unchanged, although that year will now be calculated from the newly adjusted compliance dates. Tier 1 institutions may therefore begin collecting data as early as July 18, 2024. As always, if you have any additional Section 1071 questions, feel free to reach out to us on the Hotline!