Bill Overview
Title: Making the CFPB Accountable to Small Businesses Act of 2022
Description: This bill eliminates the requirement that financial institutions must collect data regarding loans made to women-owned, minority-owned, or small businesses. In addition, the Consumer Financial Protection Bureau must justify its decision to not adopt certain alternatives to regulations applicable to small entities.
Sponsors: Rep. Fitzgerald, Scott [R-WI-5]
Target Audience
Population: People involved in or owning small businesses worldwide
Estimated Size: 60000000
- Financial institutions were previously required to collect data about loans to women-owned, minority-owned, or small businesses. Eliminating this requirement could affect these groups by reducing the oversight or understanding of their financial access.
- The Consumer Financial Protection Bureau (CFPB) makes regulations that can affect small businesses; changes in how it justifies these decisions could change regulatory impacts.
- Small businesses, particularly those owned by women or minorities, rely on data collection for useful insights and recommendations; a removal could impede these processes.
- There are tens of millions of small businesses worldwide, including a significant proportion that could identify as minority or women-owned.
Reasoning
- The policy has a direct impact on small business owners, particularly those who are women or minorities, by removing a tool previously used to monitor financial discrimination or fairness issues.
- Many small business owners may not immediately see the impact but over time could experience reduced access to financial products.
- Lenders might initially benefit from reduced reporting requirements but may face longer-term reputational risks if discriminatory practices go unchecked.
- Current support structures and financial incentive programs for minority or women-owned businesses often rely on access to this kind of data, and its elimination may affect program effectiveness.
- The policy could also standardize outcomes for small vs. large businesses by reducing a perceived additional regulatory burden.
- Business owners with established credit and financial relationships might foresee minimal changes whereas newer businesses might face more challenges.
Simulated Interviews
small business owner (Atlanta, GA)
Age: 45 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- I worry this policy will make it harder to track and prove when discrimination occurs.
- Without data, it might be easier for financial institutions to overlook women-owned businesses.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 6 | 7 |
| Year 5 | 5 | 7 |
| Year 10 | 5 | 7 |
| Year 20 | 5 | 7 |
small business owner (Phoenix, AZ)
Age: 32 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 20.0 years
Commonness: 4/20
Statement of Opinion:
- The policy seems to ease off the requirements for banks, but data are crucial for newcomers like us.
- I'm concerned about losing visibility to investors that data traditionally provided.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 6 | 8 |
| Year 5 | 6 | 8 |
| Year 10 | 5 | 8 |
| Year 20 | 5 | 8 |
financial advisor (New York, NY)
Age: 50 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 15.0 years
Commonness: 3/20
Statement of Opinion:
- This change could undermine policy analyses needed to argue for fairer access to credit.
- It feels like a step back for supporting equitable financial services.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 6 | 7 |
| Year 5 | 5 | 7 |
| Year 10 | 5 | 7 |
| Year 20 | 5 | 7 |
small business owner (Austin, TX)
Age: 28 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 3/20
Statement of Opinion:
- We rely on these data to support applications for support programs.
- Removing this could impact our ability to grow or access resources.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 5 | 6 |
| Year 5 | 4 | 6 |
| Year 10 | 4 | 6 |
| Year 20 | 4 | 6 |
banking executive (Des Moines, IA)
Age: 60 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 6/20
Statement of Opinion:
- The policy eases some regulatory burdens for us, which might make financing easier at first.
- Long term, the lack of data might hurt making sound, fair lending decisions.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 7 | 8 |
| Year 5 | 7 | 8 |
| Year 10 | 7 | 8 |
| Year 20 | 7 | 8 |
community leader (Chicago, IL)
Age: 52 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 20.0 years
Commonness: 2/20
Statement of Opinion:
- This policy dismantles foundations critical for fighting inequality in business.
- Community efforts will undoubtedly suffer due to lack of data transparency.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 5 |
| Year 2 | 4 | 5 |
| Year 3 | 4 | 5 |
| Year 5 | 3 | 5 |
| Year 10 | 3 | 5 |
| Year 20 | 3 | 5 |
restaurant owner (Seattle, WA)
Age: 41 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 3/20
Statement of Opinion:
- I might personally not feel the change, but newer owners will.
- The long-term impact could mean losing ground gained in recent years.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 6 | 7 |
| Year 5 | 5 | 7 |
| Year 10 | 5 | 7 |
| Year 20 | 5 | 7 |
professional service provider (Miami, FL)
Age: 38 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 3/20
Statement of Opinion:
- Small businesses lean on the CFPB data for insights that guide their growth.
- The policy may inadvertently reduce informed business strategies.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 5 | 7 |
| Year 5 | 5 | 7 |
| Year 10 | 5 | 7 |
| Year 20 | 5 | 7 |
start-up founder (Boston, MA)
Age: 29 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- I support less regulation but fear long-term ramifications of the policy are underthought.
- Data are important for innovation and evaluating trends.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 7 | 8 |
| Year 5 | 7 | 8 |
| Year 10 | 7 | 8 |
| Year 20 | 7 | 8 |
retired business consultant (Los Angeles, CA)
Age: 65 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 15.0 years
Commonness: 2/20
Statement of Opinion:
- The lack of data encourages unchecked bias in financial systems.
- Policymaking requires solid information, and this undermines future efforts.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 5 | 6 |
| Year 5 | 4 | 6 |
| Year 10 | 4 | 6 |
| Year 20 | 4 | 6 |
Cost Estimates
Year 1: $15000000 (Low: $10000000, High: $20000000)
Year 2: $15000000 (Low: $10000000, High: $20000000)
Year 3: $15000000 (Low: $10000000, High: $20000000)
Year 5: $15000000 (Low: $10000000, High: $20000000)
Year 10: $15000000 (Low: $10000000, High: $20000000)
Year 100: $15000000 (Low: $10000000, High: $20000000)
Key Considerations
- Potential impact on small businesses, particularly minority and women-owned enterprises, in terms of access to finance and regulatory compliance.
- The balance between reducing regulatory burden and ensuring adequate data collection for evidence-based policy-making.
- Long-term implications for financial accessibility and equality across diverse groups.