“Small businesses are crucial to the American economy and to the millions of Americans who run them, are employed by them, and who patronize them,” AFSA wrote to the CFPB this week, adding, “Credit availability, in turn, is critical to the well-being of small businesses. Without credit, many small businesses would close.” AFSA’s comments were in response to a small business lending data collection and reporting rulemaking the CFPB is engaged in as required by Section 1071 of the Dodd-Frank Act.
AFSA commended the CFPB on the thoughtful, deliberate approach it is taking with this rulemaking. Striking the right balance between meeting the requirements of Section 1071, the needs of small businesses, and the compliance challenges faced by financial institutions (FIs) is crucial.
“Requirements in this rulemaking that increase the complexity and cost are likely to decrease the number of small business loans. If each loan takes longer to make and is more expensive, fewer loans may be made. FIs will have to make cost-effective decisions about the size of loans to fund based on profitability (potentially leading to only larger loans that generate more revenue being made.) In a worst-case scenario, FIs may decide to exit the market if the regulations make it too difficult and costly for them to continue to make small business loans. Of course, this is exactly the opposite of the goal of Section 1071, but it could be the result nonetheless,” AFSA wrote.
The next step in the rulemaking will be a proposed rule, which we expect to see in 2021. AFSA will continue to be engaged with the CFPB as this rulemaking progresses.
AFSA Comments on Small Business Lending Rulemaking
Dec 15, 2020
“Small businesses are crucial to the American economy and to the millions of Americans who run them, are employed by them, and who patronize them,” AFSA wrote to the CFPB this week, adding, “Credit availability, in turn, is critical to the well-being… Read the rest
AFSA Comments on PACER Access Legislation
Dec 14, 2020
The American Financial Services Association (AFSA) today submitted a comment letter to Judiciary Committee Chair Lindsey Graham (R-SC) urging that he amend H.R. 8235 the Open Courts Act. The bill, as drafted, would allow free access to the… Read the rest
AFSA Advocacy Successful in House-passed NDAA
Dec 11, 2020
This week, the U.S. House of Representatives overwhelmingly passed the National Defense Authorization Act. President Trump has threatened to veto the bill citing its lack of legislative language removing legal liability protections… Read the rest
AFSA and Federal Agencies Provide Educational Resources During COVID-19
Dec 11, 2020
Friday was officially Director Kathleen Kraninger’s second anniversary as Director of the Consumer Financial Protection Bureau (CFPB). The second year of Director Kraninger’s tenure has been marked with unprecedented challenges as … Read the rest
Essentials for Success in the New Economy: Gaining ROI on Digital Strategies
Dec 10, 2020
Join us on December 17 at 2:00 p.m. ET for Essentials for Success in the New Economy: Gaining ROI on Digital Strategies, presented by
The shift to digital financial services has been happening for years, but COVID has been a reality check for… Read the rest
2020 By the Numbers
Dec 10, 2020
2020 has been an unprecedented year for all of us. It has, however, reinforced that consumer credit of all types is crucial to sustaining American businesses and households.
Just as our members adapted to meet the financial needs of their customers,
AFSA Comments on Electronic Service
Dec 09, 2020
AFSA’s State Government Affairs (SGA) team recently sent a comment letter to the Texas Supreme Court regarding proposed amendments to the Texas Rules of Civil Procedure that would permit electronic service of citation by social media, email,… Read the rest
AFSA Education Foundation 2020 – A Year to Remember
Dec 08, 2020
As we approach the close of 2020, I want to provide an update on the many successes of the AFSA Education Foundation. Most importantly, I thank our AFSA members for their support.
In 2020, the foundation marked its 30th anniversary. To celebrate… Read the rest
AFSA Comments on Equal Credit Opportunity Act
Dec 04, 2020
This week, AFSA responded to the Consumer Financial Protection Bureau’s (CFPB) request for information (RFI) on identifying ways to prevent credit discrimination under the Equal Credit Opportunity Act (ECOA) and expand access to credit… Read the rest
Congressional Panels Urge the Administration to Simplify PPP Loans
Dec 03, 2020
This week, Federal Reserve (Fed) Chairman Jerome Powell and U.S. Treasury Secretary Steven Mnuchin testified before the Senate Banking Committee and House Financial Services Committee to discuss the federal government’s response to … Read the rest