Small businesses (SMBs) are urging Congress to ease legislative burdens on banks they say have limited FIs’ ability to lend to SMBs, according to news from Reuters this week.
More than 100 state and local chambers of commerce sent a letter to Congress in an effort to bring attention to small businesses’ struggle to access financing. According to the letter, small business owners say financial regulations imposed on banks following the 2008 financial crisis have hindered banks’ SMB lending activity in order to adhere to new capital requirements introduced in the Dodd-Frank Act of 2010.
“We believe Congress should develop common sense reforms for community, mid-size and regional banks, which would help empower Main Street businesses,” the letter read. “We urge you to make such legislation a priority.”
Republican lawmakers in the Senate Banking Committee introduced legislation earlier in the week that aims to provide some regulatory relief on community banks. Reports said the bill would lower the threshold at which these banks are considered risky.
Reuters said the letter could place greater pressure on Democrats to back the bill. While nine Democrats currently back the legislation — the first in a broader effort to roll back Dodd-Frank, reports said — Republicans will need greater bipartisan support for it to pass.
“A year ago with a Democrat President in the White House, you could not get nine Democrats to support even common sense reforms like this,” said U.S. Chamber of Commerce president and CEO of the Center for Capital Markets Competitiveness, David Hirschmann, in an interview with Reuters. “So, what’s changed? Is it because they want to help Trump? No. It’s because they’re hearing about this from home. That’s what’s causing these Democrats to come forward and say, ‘We need to fix this.’”
“There is real understanding that if we don’t enable the banks, we are not going to have the small business lending we need,” he continued. “This is not a Wall Street issue; it’s a Main Street issue.”