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," aims to repeal Section 704B of the Equal Credit Opportunity Act, which was added by Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. This section mandates data collection and reporting requirements on financial institutions regarding small business loans. The bill argues that these requirements increase compliance costs for financial institutions, potentially reducing access to credit for small businesses, especially smaller institutions like community banks and credit unions.
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 regulatory burdens for financial institutions, potentially encouraging increased lending to small businesses. However, it could also result in less transparency regarding lending practices and potentially hinder efforts to identify and address discriminatory lending practices.
Potential Benefits
- Reduced compliance costs for financial institutions, particularly smaller banks and credit unions.
- Potential increase in the availability of credit for small businesses due to reduced regulatory burden.
- Simplification of lending processes.
- May free up resources at financial institutions that can be redirected to other areas.
- Could lead to more competitive lending rates for small businesses.
Most Benefited Areas:
Potential Disadvantages
- Reduced transparency in small business lending practices.
- Potential difficulty in identifying and addressing discriminatory lending practices without comprehensive data.
- May disproportionately affect underserved communities if data collection is reduced.
- Possible rollback of consumer protection measures.
- Could hinder efforts to ensure equitable access to credit for all small businesses.
Most Disadvantaged Areas:
Constitutional Alignment
The bill's alignment with the Constitution is indirect. Congress has the power to regulate commerce (Article I, Section 8), which includes financial institutions and lending practices. The debate centers on whether the data collection requirements are a necessary and proper exercise of this power, or whether their repeal would better serve the goal of promoting economic activity. The bill's sponsors likely believe the repeal aligns with the goal of promoting general welfare, as stated in the Preamble.
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).