In the face of challenge, Texas community bankers stepped up to comment on small business data collection rules proposed by the Consumer Financial Protection Bureau. IBAT thanks all of you who took the time to thoughtfully articulate your concerns and put them into the public record. Further, IBAT wishes to thank Mike Mauldin and the Excellence in Banking program at Texas Tech University for articulating the harmful effect of these rules on community banks via an opinion piece published last week in the Dallas Morning News.
As we now await the bureau’s deliberation and final ruling, we must ask some simple questions:
Will widespread data collection on small business lending accomplish its desired effect?
Will the rules increase credit availability to women and minority-owned businesses?
Or, at the very least, will they demonstrate the implicit or explicit bias against said business types which are assumed to exist by some policymakers?
The resulting pool of data that will exist because of Section 1071 of the Dodd-Frank Act will give us something to debate in the future. It will load the political cannon with fresh fodder for the identity politics wars.
This week, IBAT will begin circulating an additional opinion piece raising awareness among small businesses on the harmful outcomes we expect from these rules. The message is ultimately positive, however, calling to mind community bank’s effectiveness at deploying capital to those in need under the Paycheck Protection Program and calling upon lawmakers to engage the industry for solutions that will be far more effective than data collection.
We look forward to continuing to advocate for you on this and other issues. Thank you, once again, for your committed engagement for the good of your customers and communities.