The Consumer Financial Protection Bureau is taking the beginning steps of looking into the financing needs of small businesses, especially those owned by women and minorities.
The federal regulator issued a request for information to get public feedback on the small business lending market in order to gauge their access to credit.
Under Section 1071 of the Dodd-Frank Act, the CFPB is required to collect data about small business lending to help identify needs and opportunities in the market and to facilitate enforcement of fair lending laws.
“Small businesses fuel America’s economic engine, create jobs, and nurture communities. Yet little is known about how well the lending market serves their financing needs,” said CFPB Director Richard Cordray. “This inquiry will help us learn how we can best fulfill our duty to collect and report information on small business lending.”
Along with the announcement, CFPB also released a white paper reviewing the available evidence concerning the small business lending landscape. However, it noted that there is not a lot of current information on how small businesses engage with credit markets, particularly for small business owned by women and minorities.
The CFPB, as a result, published the request for information to hopefully enhance its understanding of the small business lending industry.
The bureau estimates that small businesses access about $1.4 trillion in financing, and depending on the definition used, there are an estimated 27.6 million small businesses in the United States. But as noted, a lot of the information is dated or incomplete.
Individual businesses, consumer groups, community development organizations, bank and nonbank lenders, regulators, and all other interested parties are welcome to comment.
The comment period for the public inquiry will end 60 days after the request for information is officially published in the Federal Register.
The timing for the request for information is interesting given the House Financial Services Committee published a blog earlier this week on the bureau’s lack of initiative on section 1071.
The blog went far enough to say Cordray’s failure to already implement section 1071 constitutes inefficiency and neglect of duty, giving President Trump grounds to fire him.
Under the current law, the president may remove the director for “inefficiency, neglect of duty, or malfeasance in office,” and as a lot late, there are a lot of people calling for his removal.
