Feds Must Now Publicly Justify Changes to Small Business Loan Data Privacy Measures

This bill, titled the "Bank Loan Privacy Act," introduces a new procedural requirement for the federal Bureau handling certain financial data. Specifically, it mandates that before the Bureau modifies or deletes any small business loan data collected under the existing law 15 U.S.C. 1691c-2(e)(4) for privacy reasons, it must first go through a public rulemaking process. This means publishing proposed changes, explaining how they protect privacy, and allowing for public feedback before finalizing any alterations to the dataset.

Essentially, this Act adds a layer of transparency to an existing process. The Bureau already had the authority under 15 U.S.C. 1691c-2(e)(4) to adjust this specific dataset—which is gathered to help monitor fair lending practices for women-owned, minority-owned, and small businesses—to safeguard privacy before making information public. The key change here is the requirement for advance public notice and justification. The Bureau will need to clearly outline what data they intend to change or remove and how doing so serves privacy interests, giving everyone a chance to weigh in before the data is altered for public release. It formalizes the decision-making around balancing data usefulness with privacy protection for this specific type of loan information.