Section 1 Short title
This Act may be cited as the “Preventing Regulatory Overreach to Empower Communities to Thrive and Ensure Data Privacy Act” or the “PROTECTED Act”.
Preventing Regulatory Overreach to Empower Communities to Thrive and Ensure Data Privacy Act
A BILL
To amend the Equal Credit Opportunity Act to modify the requirements associated with small business loan data collection, and for other purposes.
Sec. 2 Small business loan data collection
Section 704B of the Equal Credit Opportunity Act (15 U.S.C. 1691c–2) is amended—
in subsection (c)—
by striking “Any applicant” and inserting the following:
“(1) In general—Any applicant”
by striking the period at the end and inserting the following:
“(A) the Bureau of Consumer Financial Protection requires the financial institution to ask, collect, and report such information to the Federal Government annually pursuant to this section;
“(B) the applicant's response will not affect the financial institution’s evaluation of the request for credit; and
“(C) the applicant is not required to provide such information.”
in subsection (e)—
in paragraph (2)—
by striking subparagraphs (C), (G), and (H); and
by redesignating subparagraphs (D), (E), and (F) as subparagraphs (C), (D), and (E), respectively;
in paragraph (4)—
by striking “The” and inserting the following:
“(A) In general—The”
by adding at the end the following:
“(B) Rulemaking—The Bureau shall, before deleting or modifying data under this paragraph, and after notice and an opportunity for comment, issue rules that include a description of what modifications and deletions the Bureau intends to make to the data and how such modifications and deletions will advance a privacy interest.”
by adding at the end the following:
“(5) Prohibition on information not reported by an applicant—A financial institution may not compile and maintain information described under subsection (b) that was determined by the financial institution using visual observation or any other manner other than being provided by an applicant.
“(6) Treatment of response rate—The percentage of applicants providing a financial institution with the information described under subsection (b) may not be used as a factor in determining whether a financial institution is in compliance with the requirements under this subsection.
“(7) Safe harbor—The Bureau may not enforce compliance with the requirements of this subsection during the 2-year period beginning on the effective date described in paragraph (8).
“(8) Effective date—This subsection shall take effect on the date that is 3 years after the date on which the Bureau completes the cost-benefit analysis under chapter 6 of part I of title 5, United States Code (commonly referred to as the “Regulatory Flexibility Act”) and subchapter I of chapter 35 of title 44, United States Code (commonly referred to as the “Paperwork Reduction Act”)).
“(9) Definitions—In this subsection:
“(A) Financial institution—The term financial institution—
“(i) means—
“(I) any partnership, company, corporation, association (incorporated or unincorporated), trust, estate, cooperative organization, or other entity that—
“(aa) engages in any financial activity; and
“(bb) in each of the preceding 2 calendar years, originated not less than 2,500 credit transactions for small businesses; and
“(ii) does not include—
“(I) any financial institution with less than $10,000,000,000 in assets;
“(II) a Farm Credit System institution chartered under and subject to the provisions of the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.);
“(III) community development financial institutions, as defined in section 103 of the Community Development Banking and Financial Institutions Act of 1994 (12 U.S.C. 4702); or
“(IV) lenders involved in equipment and vehicle financing.
“(B) Small business—The term small business means an entity with gross annual revenues of not more than $1,000,000 in the preceding fiscal year.”