Mar 31, 2023
WASHINGTON, DC – National Bankers Association President and CEO Nicole Elam issued the following response to the Consumer Financial Protection Bureau (CFPB) rule that sets out data collection requirements on small business lending under section 1071 of the Dodd-Frank Act. The final rule requires covered financial institutions to collect and report data from small businesses and allows for the creation of the first comprehensive public database that covers small business lending practices.
“As an Association of Minority Depository Institutions, we support efforts that seek to increase lending to underserved small businesses and recognize that accurate data is key to achieving this goal. However, we are concerned that the CFPB has chosen to burden our community banks with additional unfunded reporting requirements that will take vital resources away from the very small businesses they serve. We were hopeful that the Bureau would have chosen to implement a limitation on the size of financial institutions who are mandated to report, but instead it chose a very low transaction limit. While we are disappointed, we do appreciate the longer implementation timeline.”
The National Bankers Association provided recommendations ahead of the rule’s release urging the Bureau to consider less intrusive alternatives and objecting to the broad, untargeted nature of the proposal. Our member banks work with customers that are often financially fragile and in communities targeted by predatory lenders. Any new requirements should have considered the size and capabilities of the bank and have allowed for exemptions or offsetting resources for smaller institutions. We firmly believe that a fair regulatory system should:
Recognize that flexibility is important in serving distressed and underserved communities, as well as moving un- and under-banked populations into the economic mainstream
Maintain effective consumer protection.