{"id":625864,"date":"2023-04-05T14:50:04","date_gmt":"2023-04-05T19:50:04","guid":{"rendered":"https:\/\/news.sellorbuyhomefast.com\/index.php\/2023\/04\/05\/pennsylvania-congressman-says-cfpb-rule-hurts-small-businesses-and-small-banks\/"},"modified":"2023-04-05T14:50:04","modified_gmt":"2023-04-05T19:50:04","slug":"pennsylvania-congressman-says-cfpb-rule-hurts-small-businesses-and-small-banks","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2023\/04\/05\/pennsylvania-congressman-says-cfpb-rule-hurts-small-businesses-and-small-banks\/","title":{"rendered":"Pennsylvania Congressman Says CFPB Rule Hurts Small Businesses and Small Banks"},"content":{"rendered":"
\n
<\/p>\n

Published: Apr 4, 2023<\/span><\/span>
\nby Gabrielle Pickard-Whitehead<\/a><\/span><\/span>
\nIn Small Business News<\/a><\/span>
\n0<\/a><\/span><\/span><\/p>\n

\n
\n
\n
\n
\n

Concerns over a new Consumer Financial Protection Bureau (CFPB) rule were recently aired by PA Congressman Dan Meuser during a full hearing of the House Committee on Small Business Subcommittee on Economic Growth, Tax, and Capital Access.<\/p>\n

Meuser, who is the Chairman of the subcommittee, read out a statement during a hearing held prior to the finalization of the new Small Business Lending Data Collection Rule. As reported on Small Business Trends<\/a> last week, the rule requires lenders to collect and report information about the small business credit applications they process.<\/p>\n

\"congressman<\/p>\n

\n
\n

\u2018Burdensome New Reporting Requirements\u2019<\/h3>\n

Attempting to dissuade the CFPB from finalizing the rule, Meuser explained that the rule will actually harm small businesses by altering the behavior of small financial institutions, making them hesitant to continue lending to small businesses. Meuser also pointed out that the \u2018burdensome new reporting requirements\u2019 will impose a larger regulatory cost burden on smaller lenders.<\/p>\n

Other problematic issues highlighted by Congressman Meuser include the new rule\u2019s potential for racial profiling, privacy concerns and an unrealistic implementation window.<\/p>\n

Huge Costs of New Rule<\/h3>\n

In his statement to the House Committee<\/a> on Small Business. Meuser explained his opposition to the new rule, saying: \u201cThis rule was born out of an obscure provision in Dodd-Frank almost 13 years ago. Most members of Congress were too busy debating too-big-to-fail to even realize it was in there.<\/p>\n

\u201cMaking matters worse, this rule will add an even larger regulatory cost burden to these small financial institutions that are already struggling to keep up with the Biden Administration\u2019s costly regulatory agenda. According to the SBA\u2019s Office of Advocacy this rule \u2018may be unnecessarily burdensome to small entities, may impact the cost of credit for small businesses and may lead to a decrease in lending to small, minority-and women-owned businesses\u2019.\u201d<\/p>\n

Meuser also outlined the costs involved, adding: \u201cThe Office of Advocacy estimates that the rule will have an initial $126 million impact on small financial institutions, and then going forward, an annual impact of $153 million. Unlike mega-banks that can absorb such costs, these will crush smaller institutions that don\u2019t have the budget to absorb such new regulatory burdens.<\/p>\n

\u201cThe Office of Advocacy also expressed concern that this rule failed to properly consider alternative less burdensome alternatives to the rule. These alternatives should have included exempting the smallest lenders but were never seriously considered.\u201d<\/p>\n

Preserving \u2018Relationship Banking\u2019 in Main Street America<\/h3>\n

One of the main themes of Congressman Meuser\u2019s statement revolved around the benefits of relationship banking, where smaller financial institutions such as community lenders build relationships with customers over several years. Meuser considers such smaller lenders to be \u2018the ones best suited to determine the structure of the loans\u2019 they provide to customers.<\/p>\n

Meuser believes relationship banking provides a personal touch that is impossible for a large national institution to replicate.<\/p>\n

Get the latest headlines from Small Business Trends. Follow us on Google News<\/a>.<\/p>\n

Image: Depositphotos<\/small><\/em><\/p>\n

\n<\/div>\n<\/div>\n
\n

Editor’s Picks<\/p>\n<\/section>\n

\n