Today, Congresswoman Maxine Waters (D-CA), the top Democrat on the House Financial Services Committee, released this statement following the Consumer Financial Protection Bureau’s move to issue a final rule implementing small business loan data collection and reporting requirements under Section 1071 of the Dodd-Frank Act, a provision that Waters drafted in 2010.
“I commend Director Rohit Chopra and the Consumer Financial Protection Bureau (CFPB) for finalizing long overdue rules under Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, a provision I drafted 13 years ago. Specifically, my provision in Dodd-Frank requires the CFPB to collect information on loans made to small businesses, including those owned by women and people of color, to shine a light on lending disparities and promote fair lending opportunities to those small businesses.
“This has been a long journey, as I and others have repeatedly pushed the CFPB to get this rule done. For example, in 2015, I led a letter with other Members urging the CFPB to finalize the rule. Then in December 2020, I wrote then President-Elect Biden urging him to fire Trump-appointed CFPB Director Kathy Kraninger, and for his new appointee to finish this important rulemaking. So, I am pleased to see the CFPB finally get this done, and I again urge the Fed to promptly complete its portion of the rulemaking focusing on motor vehicle dealers.
“Throughout my career, I’ve sounded the alarm on lending discrimination that continues to pervade our financial system, robbing millions of Americans the opportunity to buy a home or start a small business. This is especially true for women and people of color, who face significant barriers to accessing the capital they need to start or grow their business, including accessing Small Business Administration (SBA) programs. Research shows that men are more likely to secure funding than women when making the same pitch, and new Black-owned businesses start with almost three times less in capital compared with new white-owned businesses. They also show that these firms experience barriers such as time constraints and knowledge gaps regarding SBA application and documentation requirements. As we all know, small businesses are the engines of our economy – creating jobs in local communities – so when any small business isn’t able to thrive, our communities and economy pay the price.
“During the early stages of the COVID-19 pandemic, I was frustrated to watch how the Trump Administration rolled out the Paycheck Protection Program (PPP), allowing the big banks to prioritize their concierge clients instead of helping struggling small business owners, many of whom were people of color. So, I worked with then Small Business Committee Chairwoman Nydia Velazquez to secure a $60 billion set aside in the second round of PPP for community financial institutions, including community development financial institutions and minority depository institutions, to help ensure those small businesses got the relief they needed. In 2021, I led the effort to renew the State Small Business Credit Initiative, providing $10 billion in federal funds to support up to $100 billion in new loans and investments for small businesses, including those owned by people of color.
“This new data collection rule will help promote competition in the marketplace, making loans much more affordable for those wanting to start a new business. In addition, this will help create more small businesses, building on my prior efforts, as well as the unprecedented number of small businesses created – more than 10.5 million – in the last two years under the Biden Administration.
“Through this final rule, I am confident that we can finally work to root out discrimination in business lending, close funding gaps, and provide a wide array of new opportunities for small businesses, especially those owned by people of color, to grow.”
- On February 17, 2022, then Chairwoman Waters convened a virtual hearing entitled, “Small Businesses, Big Impact: Ensuring Small and Minority-Owned Businesses Share in the Economic Recovery.”
- On February 3, 2022, then Chairwoman Waters convened a virtual hearing entitled, “Building Opportunity: Addressing the Financial Barriers to Minority and Women-Owned Businesses’ Involvement in Infrastructure Projects.”
- On February 4, 2021, then Chairwoman Waters convened a virtual hearing entitled, “Supporting Small and Minority-Owned Businesses Through the Pandemic.”
- On December 4, 2020, then Chairwoman Waters sent a letter to then President-Elect Biden, providing recommendations on areas where the Biden Administration should immediately reverse the actions of the Trump Administration, and several actions that the Biden Administration can take to coordinate the federal response to COVID-19, keep people safely housed, protect consumers and small businesses, support the broader economy and ensure a global recovery.
- On July 9, 2020, then Chairwoman Waters convened a virtual hearing entitled, “Access Denied: Challenges for Women- and Minority-Owned Businesses Accessing Capital and Financial Services During the Pandemic.”
- On September 26, 2019, then Chairwoman Waters convened a virtual hearing entitled, “Examining Legislation to Protect Consumers and Small Business Owners from Abusive Debt Collection Practices.”
- On July 8, 2015, Ranking Member Waters led a letter with 13 lawmakers urging then CFPB Director Richard Cordray and Federal Reserve Chair Janet Yellen to begin the rulemaking process to implement Section 1071.