PROTECTED Act

The PROTECTED Act would modify how the Equal Credit Opportunity Act (ECOA) handles small business loan data collection. Key changes require lenders to tell applicants, in writing, that the information collection is mandated by the Bureau of Consumer Financial Protection (BCFP), that the applicant’s response won’t affect the loan decision, and that applicants are not required to provide the information. The bill also tightens what data may be collected (restricting data to what the applicant provides) and adds new rulemaking requirements about how data can be deleted or modified, with an emphasis on protecting privacy. It delays any enforcement for a two-year window and sets a three-year delay before the subsection takes effect, contingent on a cost-benefit analysis. In addition, the bill narrows who counts as a “financial institution” and who is considered a “small business,” potentially reducing which lenders are subject to these data collection requirements.