After almost a decade of complaints regarding a lack of access to credit, the Consumer Finance Protection Bureau (CFPB) has announced it will launch an inquiry into the financing needs of SMBs in the U.S., according to USA Today.
“Small businesses fuel America’s economic engine, create jobs and nurture communities. Yet little is known about how well the lending market serves their financing needs,” CFPB Director Richard Cordray said in a statement announcing a formal request for information. “This inquiry will help us learn how we can best fulfill our duty to collect and report information on small business lending.”
Of specific interest to the CFPB is how lenders identify, define and quantify small businesses — and how those evaluations tie into the review process for underwriting. The consumer watchdog will also take a closer look at typical sources of SMB credit as well as what types of information and paperwork requirements SMBs face during the application process.
At present, the CFPB is soliciting outside comment from small businesses, consumer groups, community development organizations, bank and non-bank lenders, regulators and other interested parties. That public comment period will end 60 days after the request for information is officially published in the Federal Register, the CFPB said.
The inquiry is timed to coincide with the release of a new white paper from the CFPB on small business lending and the various information gaps about the process SMBs face.
The investigation comes after years of complaints by opponents of the CFPB that its regulatory outlook — combined with its enthusiasm for fining — has had a negative effect on credit access for small and medium sized businesses.