The CFPB’s Small Business Lending RFI Has Already Received Responses

Three responses to the CFPB’s Request For Information on small business lending have already been submitted and here’s what they say.

Kent Franzen, a career banker, said that the law limiting an underwriter’s access to an applicant’s minority-owned or women-owned business status is “literally impossible.”

“Considering that in every small bank I have worked in or am otherwise familiar with the loan officer is the primary borrower contact, the loan data collector, the primary underwriter, the author of the loan documents, the notary public for collateral documents and the loan servicing agent. This requirement is literally impossible to comply with in a community bank.“

Franzen again in regards to what concerns does he have about the possibility of misinterpretations being drawn by regulators from the collection of data pursuant to Section 1071:

“[…]I am very concerned that the so called disparate impact analysis will be used as a persecution instrument against smaller institutions that present a political expedient target of opportunity. I point out the total absence of new bank charters since Dodd Frank was enacted as proof that the country has already amassed an amount of bank regulation that is slowly choking community banks. The only institutions that thrive under this crushing regulation load are those already too big to fail.”

Jayne Lovig, a loan officer, said this:

“Your request for business lending data collection is duplicating what we are already compliling and submitting to: USDA, SBA, CDFI (Community Development Financial Institutions), OFN (Opportunity Finance Network), and the Microenterprise Census Tracker. Your data collection will compound existing regulatory reporting burdens, and again, DUPLICATES WHAT WE ARE ALREADY PROVIDING TO FEDERAL LENDING AGENCIES. Why explore size standard approaches that are ALREADY defined with EXISTING agency reporting? By coming up with new definitions you will be adding unnecessary confusion. I suggest that since ALL the data you are requesting is ALREADY BEING REPORTED that you interface with the USDA and SBA (who have already “invented the wheel”) and compile the data from them electronically.”

And lastly, 13 trade associations penned a joint letter asking the CFPB to extend the RFI deadline from July 14th to September 12th to allow them adequate time to fully formulate their answers. Those associations are:

American Bankers Association
American Financial Services Association
Consumer Bankers Association
Credit Union National Association
Electronic Transactions Association
Equipment Leasing and Finance Association
Financial Services Roundtable
Independent Community Bankers of America
National Association of Federally-Insured Credit Unions
National Federation of Independent Business
Small Business & Entrepreneurship Council
Truck Renting and Leasing Association
U.S. Chamber of Commerce