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Rep. Williams Introduces Bill to Protect Small Business Lending

Jan 10, 2020
Press Release

WASHINGTON, D.C. Congressman Roger Williams (R-TX-25) today introduced the Preserving Small Business Lending Act of 2020 (H.R. 5574) to stop the Consumer Financial Protection Bureau (CFPB) from proceeding any further with the mandatory rulemaking process as set forth in Section 1071 of Dodd-Frank.

“Main Street businesses are the heartbeat of our communities and the greatest engine for economic growth in our country – and burdening them with crushing government regulations stifles growth for everyone. While the CFPB’s regulation may have positive intentions, it will impose significant new costs for financial institutions engaging in small business lending. These costs will be transferred to the applicants who rely upon the capital to expand operations and increase their workforce.

My bill, the Preserving Small Business Lending Act, prevents the CFPB from further encroaching on the normal business operations of our community financial institutions. When we make it harder for the bankers to do their job, we are making it harder for Main Street American businesses to thrive. I will always fight for greater liberty and less regulations in Washington so our small businesses can keep doing what they do best.”

H.R. 5574 strikes Section 1071 of Dodd-Frank, which requires lenders to collect demographic information from small business loan applicants. The burdensome new data collection will impose greater compliance costs for financial institutions that engage in this type of lending. Increased compliance costs on small business lenders will make it more expensive for companies to access capital.

The Preserving Small Business Lending Act received support from the Independent Bankers Association of Texas, the Consumer Bankers Association, the Independent Community Bankers of America, and Heritage Action.

Independent Bankers Association of Texas:

“The ‘sweet spot’ for community banking is small business lending.  These loans create jobs and economic activity and growth in urban, suburban and rural America.  Every loan is a unique and “high touch” relationship.  Unlike mortgage, consumer and automobile lending, statistical comparisons are virtually impossible to ascertain regardless of the amount of data collected.  We fear that the implementation of Section 1071 will not only add to an already untenable level of regulatory burden and compliance costs, but push a number of community banks out of the small lending space and lead to further consolidation and concentration in our industry. We strongly support equitable and fair treatment for all bank customers, but have serious concerns about the very real unintended consequences of small business loan reporting and analysis.  We are appreciative of Congressman Williams’ efforts to bring this complex issue to the forefront with H.R. 5574.”

Richard Hunt, President and CEO, Consumer Bankers Association:

“CBA member banks are among the leading providers of credit to small businesses. The new Dodd-Frank Act small business loan reporting requirements were vague, overly broad and virtually impossible to enact – as evidence from the fact nearly a decade after passage the rule has yet to be implemented by regulators. The result of these new requirements would not have been better information, but less credit for small businesses on Main Street. We support repealing this requirement and stand ready to work with Congress and regulators to ensure small businesses continue to have access to the credit they need to grow.”

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Congressman Roger Williams represents the 25th Congressional District of Texas and serves as a member of the House Committee on Financial Services.