U.S. Rep. Scott Fitzgerald (R-WI) has introduced a bill that seeks to restore Consumer Financial Protection Bureau (CFPB) small business accountability.
The Making the CFPB Accountable to Small Business Act would repeal Section 1071 of the Dodd-Frank Act while requiring the CFPB to presume that size and sophistication-based tailoring of regulations are needed in SBREFA (Small Business Regulatory Enforcement Fairness Act) panel reviews.
“President Biden’s woke agenda has come for community banks and credit unions,” Fitzgerald said. “The Biden administration’s overregulation of the banking industry, all in the name of equity, is squeezing community lenders who cannot afford the costs associated with compliance. Wisconsin lenders will be at risk if Section 1071 is implemented and bureaucrats fail to consider the needs of small businesses.”
Per Fitzgerald, Section 1071 of the Dodd-Frank Act requires lenders to collect and report 12 data points in connection with credit applications made by women- or minority-owned businesses as well as all small businesses. Fears of unfounded fair lending violations will result in homogenized loan terms, less customization of small business loans to meet borrowers’ needs, and reduced credit access.
The legislation is supported by the Credit Union National Association (CUNA), Independent Community Bankers of America (ICBA), National Association of Federally-Insured Credit Unions (NAFCU), and Wisconsin Bankers Association (WBA).