U.S. Rep. French Hill (R-AR) on March 27 led a Republican bill that aims to protect America’s small banks and lenders from excessive federal compliance standards.
Rep. Hill sponsored the Small Lenders Exempt from New Data and Excessive Reporting (LENDER) Act, H.R. 1806, with two GOP original cosponsors, to codify “financial institution” as one that originates at least 500 covered transactions in each of the last two years, as opposed to the 25-transaction threshold proposed in the Consumer Financial Protection Bureau’s (CFPB) notice of proposed rulemaking (NPRM).
Additionally, H.R. 1806 would codify “small business” as one with gross annual revenues of $1 million or less in the last year instead of $5 million or less as defined in the NPRM, according to a bill summary provided by the lawmakers.
The measure also would extend the effective compliance date with the final rule to be three years after publication in the Federal Register plus a two-year grace period, as opposed to the 18-month implementation period in the NPRM, the summary says.
Rep. Hill on March 28 released a joint statement with the original cosponsors of H.R. 1806, U.S. Reps. Roger Williams (R-TX) and Blaine Luetkemeyer (R-MO), noting that it’s critical for small businesses and lenders to have access to needed capital to help their communities thrive.
“The CFPB’s proposed regulation hurts small businesses by making credit more costly and imposes significant compliance costs that disproportionately impact smaller companies,” Rep. Hill and his colleagues said. The Small LENDER Act “… would provide regulatory relief to community banks and other small lenders.”
Small businesses should not be subjected to the same compliance parameters as large businesses, added the members.
“Our bill makes essential changes to exempt smaller banks and other lenders from having to comply with the CFPB small business data collection regulation in the absence of Congress repealing Section 1071 of Dodd-Frank,” they said.
H.R. 1806 is supported by the Credit Union National Association, First Security Bank, the Independent Community Bankers Association, Farmers & Merchants Bank, and the Arkansas Bankers Association.