The credit union perspective was highlighted during the Consumer Financial Protection Bureau’s (CFPB) field hearing Wednesday on small business lending. Sharon Lindeman, vice president of regulatory advocacy for the California and Nevada Credit Union Leagues, asked the bureau to proceed with caution when it comes to drafting a definition for small businesses and small business loans, and to limit data collection to the elements specifically required by the Dodd-Frank Act.
“Since the great recession, credit unions have actually seen growth in small business lending. Many consumers turned to their credit union for their small business loan needs after they experienced difficulty obtaining loans from larger institutions,” Lindeman said. “Credit unions provide needed capital to existing small business as well as startups.”
NCUA excludes member business loans from the statutory cap when the loan balance is equal to or less than $50,000, and Lindeman said the bureau should also exempt those same loans from any small business lending rulemakings.
“The leagues urge the bureau to narrowly define a small business loan, and not create a conflicting definition that would result in an administrative nightmare for credit unions,” she said.
She also urged the bureau, when it comes to reporting on loans to minority- and women-owned businesses, to not require additional data far more what the Dodd-Frank Act requires.
Lindeman cited the bureau’s previous rulemaking on the Home Mortgage Disclosure Act, which requires submission of more data points rather than the 17 required by Dodd-Frank.
“The expanded data collection created an additional burden on credit unions,” Lindeman said.
Wednesday’s field hearing was held in conjunction with a CFPB release of a request for information(RFI) on the small business lending market.
According to the bureau, it seeks “to learn more about the small business financing market, including understanding more about the products that are offered to small businesses, including women-owned and minority-owned small businesses, as well as the financial institutions that offer such credit.”
Comments must be received by CFPB within 30 days of the RFI’s publication in the Federal Register, which is expected in the coming days.
Source: CUNA News Now