The CFPB is Asking The Wrong Questions, Bank President Says

David Ludwig, the Bismarck branch president of Security First Bank of North Dakota, responded to the CFPB’s small business lending RFI earlier this week. In his written comment, he points out the futility of examining race, gender and ethnicity to judge how a lender is approving business loans. These data points are what the CFPB is hoping to gather pursuant to Section 1071 of Dodd-Frank to examine potential discrimination.

“The bureau appears to only want to know the applicants’ income, sex, race, amount of request and if the loan was approved or not,” he wrote. “Some people have less education, less ability, less equity and not so good credit history. These are not sex or race issues.”

Ludwig says there is no place for discrimination in lending and that if the CFPB was really interested in attributes about business owners that may be impacting their approvals, they should be asking about the owners’ work history, education, equity in the business, loan purpose and other related questions.

You can read his full comment here