“The White House’s misguided woke policies put Louisiana’s small business owners at risk. . . . Congress must stop the Biden administration’s virtue signaling from penalizing small businesses that serve our communities and local economies—and that is what this bill would do.”
MADISONVILLE, La. – Sen. John Kennedy (R-La.), a member of the Senate Small Business Committee, joined Sen. John Boozman (R-Ark.) in introducing the Small LENDER Act to ensure that small businesses can access capital from lenders. The legislation would block the Biden administration’s Consumer Financial Protection Bureau (CFPB) from requiring community banks and lenders to collect and report social data—such as race, gender and ethnicity—from borrowers.
“The White House’s misguided woke policies put Louisiana’s small business owners at risk. Already struggling under historic inflation, these job creators can’t afford to lose access to capital. Congress must stop the Biden administration’s virtue signaling from penalizing small businesses that serve our communities and local economies—and that is what this bill would do,” said Kennedy.
The CFPB finalized its rule requiring lenders to gather information regarding the immutable characteristics of small business owners and prioritize them over financial factors, such as credit, last month. If left unchecked, the CFPB’s rule will make it more difficult for business owners to take out a loan for capital that they need to run their operations.
“The Biden administration created hurdles for small businesses that would prevent growth and predictability in the initial proposal, and unfortunately didn’t fix those mistakes in the final rule. The CFPB’s rule adds yet another burden by driving up the cost of capital and politicizing small business lending on the basis of social factors. The Small LENDER Act encourages investment and ensures access to financing by preventing the agency from imposing an unfunded mandate on many community banks and small lenders that invest in the backbones of our economy,” said Boozman.
The Small LENDER Act would:
- Exempt the smallest lenders by establishing a 500-covered small business credit transaction threshold.
- Provide small business relief by codifying a small business as one with $1 million or less in revenue.
- Give lenders and small businesses more time to comply by establishing a three-year implementation schedule plus a two-year grace period.
Sens. Chuck Grassley (R-Iowa), Cynthia Lummis (R-Wyo.), Kevin Cramer (R-N.D.) and Steve Daines (R-Mont.) are also cosponsors.
Rep. French Hill (R-Ark) is leading companion legislation in the House of Representatives.
“I was proud to see the Small LENDER Act reintroduced by Senator Boozman and I thank him for working to ensure small banks are not subjected to the same compliance criteria as large businesses,” said Hill.