Consumer Financial Protection Bureau Advances Fair Lending Rules for Small Businesses
September 1st, 2021
HOPE Response to Historic Step by the CFPB
Today, the Consumer Financial Protection Bureau (Consumer Bureau) took a significant step towards a fairer marketplace for small businesses. The Consumer Bureau released its proposed framework for requiring that lenders provide transparent data about their lending to small businesses and minority and women owned businesses. Congress mandated that the Consumer Bureau implement this framework under section 1071 of the 2010 Dodd Frank Consumer Bureau and Wall Street Reform Act, the overhaul reform legislation passed in the wake of the 2008 financial crisis. HOPE engaged with the Consumer Bureau during the early stages of the proposal’s development, including serving on a panel of small lenders to provide feedback and guidance in the development of the proposed rules. The Consumer Bureau will seek public feedback on the proposed rules for 90 days following their publication in the Federal Register.
Statement by HOPE CEO Bill Bynum:
“The proposal released today is vital to creating a level playing field for small business borrowers, regardless of their race, gender, or geography. Data and transparency about lending to minority and women owned businesses is necessary for a fair and functioning financial service marketplace.
In an increasingly diverse America, strong minority and women-owned businesses are essential to a robust economy. Small businesses of color are more likely to employ people of color. Ensuing access to capital for underserved entrepreneurs helps close the racial wealth gap, and strengthen the vitality of the entire economy. While white adults have 13 times their wealth of Black adults, the gap closes to three to one when comparing the median wealth of white business owners to Black business. Ultimately, closing the racial wealth gap has the potential to increase the national Gross Domestic Product (GDP) between $1 and $1.5 trillion by 2028.
With today’s proposal as a critical step, the Consumer Financial Protection Bureau has the opportunity to help close these existing gaps, to the benefit of businesses and lenders alike”