John Taylor, President and Founder of the National Community Reinvestment Coalition, testified today at the Consumer Finance Protection Bureau’s (CFPB) Symposium: Section 1071 of the Dodd-Frank Act.
CFPB organized the symposium to hear from industry and the public on issues surrounding small business lending data.
Section 1071 of the Dodd-Frank Act of 2010 amended the Equal Credit Opportunity Act (ECOA) to require financial institutions to collect and report information regarding women and minority-owned small business credit applications. The CFPB has yet to implement this section. And without it, obtaining data on small business lending is difficult and incomplete, as NCRC found with a recent report.
“One of the basic conclusions of the CFPB was that there exists a gap in the available data that limits their understanding of the small business financing market,” Taylor said in his opening remarks at the symposium. “NCRC and others agree and have reached this same conclusion, that the small business lending data available simply was inconclusive and that further detail or data was needed to measure the level of commitment by financial institutions to address the small business needs of minorities and women.”
In written testimony submitted to the CFPB prior to the symposium, Taylor urged the Bureau to “expeditiously proceed with this important rulemaking.”
“By holding institutions accountable, public data disclosure effectively motivates financial institutions to increase their lending to traditionally underserved small businesses,” he said. “Robust data also more precisely identifies the causes of unmet credit needs and therefore helps stakeholders to more efficiently craft policies and programs to meet the unmet needs.”