NCRC Releases White Paper on Improving the Quality and Accessibility of Small Business Loan Data
Washington, DC – Today, the National Community Reinvestment Coalition (NCRC) released “Recommendations to the Consumer Financial Protection Bureau for Implementing Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010,” a white paper presenting recommendations on the collection and public availability of small business loan data from financial institutions.
“The collection and public reporting of small business lending data was mandated by Dodd-Frank to shine a light on lending activity and inactivity when it comes to serving women-owned, minority-owned and small businesses,” said NCRC President and CEO John Taylor. “It is absolutely critical that the CFPB move forward with requiring the reporting of robust small business loan data. It is also important that they make the data easily accessible. Better data will help to motivate responsible lending to underserved communities and improve access to credit. Congress put this data collection into law and it’s time for the CFPB to put it into action.”
NCRC provides recommendations on the types of data that should be collected, the institutions that should be required to report the data, and how the data should be collected and made accessible:
- Among the data elements required to be collected on race, ethnicity, and the revenue size of the business, NCRC recommends subcategories to provide more details on lending patterns to a greater variety of racial and ethnic groups and microbusinesses. NCRC also recommends capturing information on which borrowers applied and which were denied on loan applications, and the type and purpose of loans.
- NCRC recommends the collection of additional data elements beyond those required. These data elements include pricing data on the loan, the creditworthiness of the small business owner and the small business itself, and the number of employees of the business.
- To ensure a comprehensive picture of small business lending, NCRC recommends expanding the types of institutions required to report data to include banks of all sizes and non-banks, such as credit unions and non-depository lenders.
- Currently, five separate government agencies collect and release small business loan data using different specifications. To streamline this process, NCRC recommends these agencies report their data to the Federal Financial Institutions Examination Council (FFIEC) for centralized compilation and dissemination.
- When releasing the data, NCRC recommends that the data be placed on the FFIEC and CFPB websites in an easy-to-use format for performing data analyses.
The white paper was made possible by generous funding from the Surdna Foundation. The full paper can be read here.
About the National Community Reinvestment Coalition (NCRC):
The National Community Reinvestment Coalition is an association of more than 600 community-based organizations that promote access to basic banking services, including credit and savings, to create and sustain affordable housing, job development and vibrant communities for America’s working families.