Banking Chairman Brown and Democratic Colleagues Push CFPB to Improve Lending for Women-owned, Minority-owned, and Small Businesses
U.S. Senator Sherrod Brown (D-Ohio), Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, and several of his Democratic colleagues recently sent a letter to Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra urging the agency to improve lending for small businesses and businesses owned by women and minorities.
“For years, we have pushed the CFPB to move forward on this important rulemaking, and we are pleased that you are doing so now,” the letter reads. “It is the CFPB’s responsibility to carry out this mandate by issuing a final rule as soon as practicable.”
A new proposed rule by the CFPB supports access to credit for small businesses, but the Senators pushed for improvements to be made so that the final rule can bring transparency in supporting more women-owned and minority-owned businesses.
The rule excludes certain credit transactions from the group of “covered credit transactions” that are subject to the reporting requirements. Among the exclusions are leases and consumer-designated credit used for business purposes. The Senators also expressed concern that the exclusions could cause a lack of understanding of the small business lending marketplace.
The Senators were also concerned about the CFPB’s plan to propose a “balancing test” to assess the benefits and risks of public disclosure of Section 1071 the Dodd-Frank Act, which amended the Equal Credit Opportunity Act (ECOA). They requested that the Bureau consider the interests of both institutions and small business owners as it analyzes the collected data.
“Ultimately, we commend the CFPB for initiating this long overdue rulemaking to fulfill a statutory mandate from Dodd-Frank. We are eager to see a final rule that will bring much-needed transparency to small business lending and facilitate enforcement of fair lending laws,” the Senators concluded.
Brown was joined in writing the letter by Senators Ben Cardin (D-Md.), Chair of the Senate Committee on Small Businesses and Entrepreneurship, Ron Wyden (D-Ore.), Dick Durbin (D-Ill.), and Cory Booker (D-N.J.).
The full text of the letter is available here.