WASHINGTON – U.S. Sen. John Boozman (R-AR) is leading a Senate Republican effort to fight the Biden administration’s attempt to pick small business winners and losers based on social factors.
the Small Lenders Act would prevent the Consumer Financial Protection Bureau (CFPB) from requiring community banks and lenders to collect and report social data on small businesses seeking loans. Instead of focusing on creditworthiness, the CFPB proposal would require lenders to solicit the race, gender and ethnicity of small business borrowers and disclose them to federal bureaucrats in Washington. The move would prioritize these social factors, impose additional red tape on lenders and make it more difficult for small businesses to access capital.
“Small businesses are experiencing historic inflation rates, skyrocketing energy costs and supply chain disruptions due to Biden administration policies. They are the backbone of the economy, and the CFPB proposal would add yet another burden by driving up the cost of capital. the Small Lenders Act encourages investment and ensures access to finance by preventing the agency from imposing an unfunded mandate on many community banks and small lenders,” said Boozman.
the Small Lenders Act would like to:
- Exempt smaller lenders by establishing a threshold of 500 covered transactions;
- Provide small business relief by coding a small business as a small business with revenue of $1 million or less; and
- Give lenders and small businesses more time to comply by establishing a three-year implementation schedule plus a two-year grace period.
The bill’s co-sponsors are Senators Kevin Cramer (R-ND), Cynthia Lummis (R-WY) and Thom Tillis (R-NC).
Complementary legislation was introduced in the United States House of Representatives by Congressman French Hill (R-AR).
“Access to capital for small businesses is the lifeblood of our local communities, and small Central Arkansas lenders often lead the way by investing in the neighborhoods they serve. The regulations proposed by the Consumer Financial Protection Bureau would make the cost of credit higher and impose significant compliance costs on small businesses,” said Hill. “The Small Lenders Act will make the necessary changes to exempt small banks and lenders from having to comply with the CFPB’s onerous new regulations on collecting small business data. I thank my colleague from Arkansan, Senator Boozman, for leading this effort in the Senate and for introducing related legislation to my bill, HR 6732, the Small Lenders Act.”
the Small Lenders Act is supported by the Arkansas Bankers Association, Independent Community Bankers Association, Credit Union National Association, National Association of Federally-Insured Credit Unions, and Equipment Leasing and Finance Association.