1071 Repeal to Protect Small Business Lending Act
Should HB 976 be enacted, it would amend the Equal Credit Opportunity Act and eliminate the section requiring financial institutions to report data on small business loans. This change is anticipated to lower regulatory barriers, thereby promoting broader access to credit for small businesses. The bill asserts that without these data collection obligations, smaller financial institutions can operate more efficiently and provide loans more readily, potentially spurring economic growth and development in the small business sector.
House Bill 976, titled the '1071 Repeal to Protect Small Business Lending Act', seeks to repeal the data collection requirements imposed on small business loans under Section 704B of the Equal Credit Opportunity Act. Introduced on February 4, 2025, the bill underscores the need to alleviate the compliance burden on financial institutions, particularly smaller entities like community banks and credit unions, which are crucial for lending to small businesses. The proponents argue that the existing requirements, established by the Dodd-Frank Wall Street Reform and Consumer Protection Act, have led to increased costs that may limit access to credit for these enterprises.
The bill has sparked a degree of contention among stakeholders. Supporters argue that the data collection mandates impose unnecessary burdens that hinder lending. They posit that repealing these requirements will empower banks to focus more on lending rather than regulatory compliance. Conversely, critics of the repeal caution that without these data collection efforts, there may be a lack of transparency and oversight in lending practices, which could adversely affect small businesses, particularly those owned by minorities or economically disadvantaged individuals. The debate centers around the balance of regulatory oversight and supporting business funding.
Finance and Financial Sector