Section 1071 and DSCR lending: questions to verify

Section 1071 is a data-collection rule, not a lending rule, and the first thing worth learning is who it actually touches. It comes from Section 1071 of the Dodd-Frank Act, the post-2008 financial reform law, and it directs the Consumer Financial Protection Bureau (CFPB) to require certain lenders to collect and report demographic and pricing data on small-business loan applications. The final rule became effective June 30, 2026, with a compliance start date of January 1, 2028, and was published in the Federal Register on May 1, 2026 (91 FR). Applicability depends on the entity, its volume, and current regulatory guidance, so confirm timing with qualified counsel.

A covered lender, in this rule, is a lender that clears a specific loan-volume threshold. Below the threshold, the collection and reporting obligations simply don't attach, and that single definition does most of the work in deciding whether a DSCR lender is in or out.

The threshold that matters: 1,000 originations

A lender is only subject to Section 1071 if it originated at least 1,000 covered small-business loans in each of the two preceding calendar years. An origination here means a loan actually made, not merely applied for, and both years have to clear the bar. The final rule raised this threshold substantially from the 2023 rule's 100 originations, and the effect looks deliberate: per the CFPB's own coverage analysis, the 1,000-loan line still captures roughly 92-93% of small-business loan volume while exempting the vast majority of lenders by institution count. A non-bank DSCR lender originating fewer than 1,000 covered loans a year in either of the two look-back years sits outside the rule entirely.

A threshold-based rule isn't unusual. Commercial trucking regulation works the same way: the paperwork regime applies to fleets above a certain size, because that's where most of the freight moves, while a two-truck operation stays out of scope. Section 1071 follows the same logic. The dollars are regulated; the long tail of small originators isn't.

How the 2026 rule narrowed the 2023 rule

The 2026 rule is a reconsideration of the final rule the CFPB issued in 2023, and it narrowed that rule on several dimensions at once. Each change carries a direct consequence for the DSCR market. The borrower size cap dropped from the 2023 rule's $5 million to $1 million in gross annual revenue, which matters because it defines whose applications generate data in the first place. The data burden shrank from 20 collected data points to 15, and reporting stays annual, with the first register due June 1, 2029, which lowers the operational cost for lenders that are covered.

Two data points from the 2023 rule were removed entirely: the LGBTQI+ data point and the application-method data point. Loans of $1,000 or less are excluded from data collection altogether. The $1 million revenue cap is the row that matters most for this market, since DSCR borrowers are typically individual investors or small LLCs rather than mid-market businesses. That cap is the provision deciding whether their applications count as small-business applications at all.

Indirect exposure through warehouse facilities

A below-threshold lender can still feel this rule through its warehouse line. A warehouse line is a short-term credit facility from a bank that funds a lender's loans until they're sold, and that bank is a counterparty in the pipeline. If the bank itself sits above the 1,000-loan threshold, it may impose Section 1071 data collection requirements on the pipeline and require the originating DSCR lender to pass through compliant data, even though the originator is under the threshold on its own. The obligation arrives by contract rather than by regulation, which is why reading only the rule can leave the wrong answer. Verify with the warehouse lender, and keep the counterparty picture current the same way you'd track program changes in Lender Intelligence.

The compliance calendar

The last row repeats forever because the threshold looks backward at the two preceding calendar years: coverage isn't a one-time determination, it's a question a lender re-answers every year with fresh numbers. The practical step is annual monitoring, tracking the trailing origination count starting now, so the answer to "are we covered" is never a surprise.

The practical test comes down to a few moves: define a covered lender, apply the 1,000-origination test to a specific lender's two-year history, and remember why the $1 million revenue cap shapes which DSCR applications generate data in the first place. Then ask a warehouse counterparty the one question regulation alone can't answer: will you require pass-through data on my pipeline?

1071 data collection doesn't start until 2028. Under 1,000 originations, the clock isn't running yet, but it pays to know exactly when it starts.

This explains the law; it isn't advice on your file. Tax and legal conclusions belong with a qualified professional, and any financing detail should be checked against the responsible provider's current, dated eligibility and pricing materials.

• Section 1071 final rule (Federal Register) →
• Consumer Financial Protection Bureau →
• Lender Intelligence →
• State Rule Engine →