WASHINGTONĀ ā U.S. Senator John Boozman (R-AR) is leading a Senate Republican effort fighting against the Biden administrationās attempt to pick small business winners and losers based on social factors.
TheĀ Small LENDER ActĀ wouldblock 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 toĀ solicitĀ the race, gender, and ethnicity of small business borrowersĀ and divulge it to federal bureaucrats in Washington. The moveĀ would prioritize theseĀ social factors, place additional red tape before lenders andĀ makeĀ it harder for small businesses to access capital.
āSmall businesses are experiencing historic inflation rates, skyrocketing energy costs and supply chain disruptions as a result of the Biden administrationās policies. They are the backbone of the economy, and the CFPBās proposal would add yet another burden by driving up the cost of capital. TheĀ Small LENDER ActĀ encourages investment and ensures access to financing by preventing the agency from imposing an unfunded mandate on many community banks and small lenders,āĀ Boozman said.
TheĀ Small LENDER ActĀ would:
Exempt the smallest lenders by establishing a 500-covered transaction threshold;
Provide small business relief by codifying a small business as one with $1 million or less in revenue; and
Give lenders and small businesses more time to comply by establishing a three-year implementation schedule plus a two-year grace period.
Cosponsors of the bill include Senators Kevin Cramer (R-ND), Cynthia Lummis (R-WY) and Thom Tillis (R-NC).
Companion legislation was introduced in the U.S. House of Representatives by Congressman French Hill (R-AR).
āAccess to capital for small businesses is the lifeblood of our local communities, and smaller lenders across central Arkansas often lead the way in investing in the neighborhoods they serve. The proposed regulation by the Consumer Financial Protection Bureau would make the cost of credit more expensive and impose significant compliance costs on smaller companies,āĀ Hill said.Ā āTheĀ Small LENDER ActĀ will make necessary changes to exempt smaller banks and lenders from having to comply with the CFPBās new, onerous small business data collection regulation. I thank fellow Arkansan, Senator Boozman, for leading this effort in the Senate and introducing companion legislation to my bill, H.R. 6732, theĀ Small LENDER Act.āĀ
TheĀ Small LENDER ActĀ is supported by the Arkansas Bankers Association, the Independent Community Bankers Association, the Credit Union National Association,Ā the National Association of Federally-Insured Credit UnionsĀ and the Equipment Leasing and Finance Association.