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American Banker: States take different paths on small-business loan disclosures

American Banker, April 12, 2022, States take different paths on small-business loan disclosures

Small businesses in Virginia and Utah will soon get clearer disclosures about the money they borrow from merchant advance companies.

But the disclosures will be lacking one number: the annual percentage rate they will pay for each loan. That won’t be the case in New York and California, where lawmakers are requiring nonbank business lenders to disclose APRs.

The divergent paths in the states — and future fights in more statehouses — are the result of opposing lobbying efforts by lenders and a debate over whether APRs make sense for some types of business loans.

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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