U.S. Rep. Nydia M. Velázquez (D-NY) has introduced legislation to broaden non-bank lender reporting and examination requirements under the Consumer Financial Bureau (CFPB).
The Promoting Fair Lending to Small Businesses Act (H.R. 7351), which was recently referred to the House Committee on Financial Services, amends the Dodd-Frank Act of 2010, requiring non-bank lenders, such as those in the fintech sector, to be covered by the rules implemented under Section 1071.
“This bill will play an important role in applying the same standards for all lenders who make loans for small businesses, and especially those that have been historically underserved by lenders such as minority- and women-owned businesses,” Velázquez said. “I was proud to help support the inclusion of Section 1071 in the Dodd-Frank Act at the time of its passage, and this bill is a commonsense step to help small businesses get the responsible credit options they need to drive America’s economy forward. As we saw with the PPP program, fraudulent loans were a major problem for small businesses, and this bill will help prevent unscrupulous lenders from seeking to take advantage of America’s small businesses.”
The CFPB would require reports and conduct examinations on a periodic basis of covered non-depository lenders for purposes of assessing compliance with the requirements of the Equal Credit Opportunity; obtaining information about the activities and compliance systems or procedures of the covered non-depository lender; and detecting and assessing risks to minority-owned businesses, women-owned businesses, small businesses and to markets for credit to such businesses.