On February 17, the House Committee on Financial Services Subcommittee on Consumer Protection and Financial Institutions held a hearing entitled, “Small Businesses, Big Impact: Ensuring Small and Minority-Owned Businesses Share in the Economic Recovery.” Marla Bilonick, OFN board member and president and CEO of the National Association for Latino Community Asset Builders (NALCAB), testified at the hearing.
During their testimonies, National Urban League’s Stephanie DeVane and NALCAB’s Marla Bilonick underscored the importance of the Small Business Lending Disclosure Act of 2021, which aims to enhance the Consumer Financial Protection Bureau’s (CFPB) oversight of small business lenders and increase transparency related to terms and fees for small commercial loans.
OFN supports this legislation because it will help small businesses access affordable, responsible financing and avoid high-cost predatory loan products. Our recent blog post outlines the industry’s support requiring lenders to disclose key information, including the annual percentage rate (APR), to ensure entrepreneurs have the knowledge they need to make financial decisions that grow and strengthen their businesses.
The Subcommittee on Consumer Protection and Financial Institutions Chair Rep. Ed Perlmutter (D-CO) and Committee Democrats highlighted the impact of several federal COVID-19 relief programs including the Paycheck Protection Program (PPP) and State Small Business Credit Initiative (SSBCI).
House Financial Services Committee Chair Rep. Maxine Waters (D-CA) discussed disparities in mainstream lending during the COVID-19 pandemic and highlighted how community development financial institutions (CDFIs) and minority depository institutions (MDIs) filled these gaps where traditional institutions failed to get capital to historically disadvantaged small business owners. Chair Waters also called attention to the more than $60 billion in COVID-19 relief investments overseen by the Committee over the last two years. These relief measures included $12 billion for the Emergency Capital Investment Program (ECIP) and the CDFI Fund’s Rapid Response Program (RRP).
Ranking Member Blaine Luetkemeyer (R-MO) outlined his concerns related to the CFPB’s Section 1071 small business data collection. Similarly, Rep. Roger Williams (R-TX) discussed the introduction of the Preventing Racial Profiling in Lending legislation to prevent the implementation of the CFPB’s proposed rule allowing loan officers to guess the race and ethnicity of small business owners.
Policymakers and witnesses also discussed the following legislation during the virtual event:
- The Small Business Lending Disclosure Act – Rep. Nydia Velázquez (D-NY)
- The Small Business Fair Debt Collection Protection Act – Rep. Al Lawson (D-FL)
- The Promoting Fair Lending to Small Businesses Act
- The Small Business Lender Registry