H.R.976 - 1071 Repeal to Protect Small Business Lending Act (119th Congress)
Summary
H.R. 976, the "1071 Repeal to Protect Small Business Lending Act," seeks to repeal Section 704B of the Equal Credit Opportunity Act, which was added by Section 1071 of the Dodd-Frank Act. This section mandates data collection and reporting requirements for financial institutions regarding small business loans. The bill argues that these requirements increase compliance costs for financial institutions and potentially reduce access to credit for small businesses, especially impacting smaller institutions.
Expected Effects
If enacted, H.R. 976 would eliminate the data collection and reporting requirements related to small business loans under the Equal Credit Opportunity Act. This could lead to reduced compliance costs for financial institutions. It may also alter the landscape of small business lending, potentially affecting the availability and terms of credit.
Potential Benefits
- Reduced compliance costs for financial institutions, particularly smaller banks and credit unions.
- Potential for increased access to credit for small businesses due to reduced regulatory burden.
- Simplification of lending processes, making it easier for financial institutions to offer loans.
- May encourage more financial institutions to participate in small business lending.
- Could free up resources at financial institutions to focus on other areas of business development.
Most Benefited Areas:
Potential Disadvantages
- Reduced transparency in small business lending practices, potentially hindering efforts to identify and address discriminatory lending practices.
- Loss of valuable data that could be used to understand and improve small business lending markets.
- Potential for increased lending disparities if data collection is not required.
- Weakening of consumer protection measures related to fair lending practices.
- May disproportionately affect minority-owned and women-owned small businesses if data on lending to these groups is no longer collected.
Most Disadvantaged Areas:
Constitutional Alignment
The bill's constitutional alignment is complex. Congress has the power to regulate commerce under Article I, Section 8, which includes the power to regulate financial institutions and lending practices. The repeal could be argued as a matter of economic policy within Congress's purview. However, the Equal Protection Clause of the Fourteenth Amendment might be relevant if the repeal leads to discriminatory lending practices that were previously monitored and addressed through the data collection requirements.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).