Providing for Congressional Disapproval of the Rule Submitted By the Bureau of Consumer Financial Protection Relating to ``Small Business Lending Under the Equal Credit Opportunity Act (Regulation B)''
Floor Speech
BREAK IN TRANSCRIPT
Ms. WATERS. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, S.J. Res. 32 would repeal the CFPB's small business lending rule, which was required by Congress in section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The CFPB's rule would simply require lenders to collect and report data on small business lending. This data will help drive competition in the market, lowering small business costs, and help combat discrimination.
I worked closely with my colleague, Congresswoman Nydia Velazquez, who is the ranking member of the Small Business Committee, to ensure that this provision was included in the Dodd-Frank Act because we both knew how critical this data would be to helping small businesses.
Access to capital is a key challenge that many small businesses face. For example, Goldman Sachs found that over 75 percent of small businesses they surveyed were concerned about access to capital. Research has also shown that minority-, women-, and LGBTQ+-owned businesses are more likely to be denied loans and pay steeper interest rates.
Access to capital is an issue for many family farms, which don't have the same access that larger agricultural corporations have. In addition, access to capital is an issue for our young people working in the gig economy seeking to start a business of their own but too often told ``no'' by banks.
Unfortunately, section 1071 of Dodd-Frank was not implemented for 13 years. In fact, small business owners had to sue the CFPB under the Trump administration to force implementation of this rule.
One of the small business owners who sued the CFPB was ReShonda Young, a Black woman who founded Popcorn Heaven, a small business selling gourmet popcorn in Waterloo, Iowa. Ms. Young explained that she was a victim of discriminatory lending practices, saying: ``In several instances, there was just blatant discrimination, and in other cases, I found out about it later on. And it wasn't just me.''
She further explained: ``I had a regular hourly income. My personal expenses were pretty low, so it wasn't like I couldn't cash infuse from my personal [income] if I needed to. My credit score was good, but I couldn't get what I needed. . . . Enough of the disrespect. Enough with the blatant disrespect. When a bank says, `We don't want your business for any good reason. Why don't you move your account elsewhere?' it was at that point, okay, something has to be done.''
The CFPB, under the leadership of a Trump appointee, settled the case and agreed to a court-supervised timeline, resulting in the final rule that the CFPB issued this year.
Now that the CFPB's rule has been finalized after all of these years, so many other small businesses in Iowa, North Carolina, Texas, California, and all across the country will be able to reap the benefits of a more transparent lending marketplace that Ms. Young should have had.
Specifically, the CFPB rule will allow small businesses to comparison shop between lenders and see how much other small businesses are being charged for their loans. This price transparency is essential to a competitive and fair marketplace.
In designing the rule, the CFPB was mindful of its impact on community financial institutions. For example, the rule completely exempts lenders that originated fewer than 100 small business loans in each of the 2 preceding years. This fully exempts more than 80 percent of depository institutions, including 98 percent of credit unions. For lenders that originated more than 100 loans, they would have more than 2 years before they would need to begin to comply with the rule in 2026.
Make no mistake, S.J. Res. 32 is just another part of Republicans' relentless attack on the CFPB. They have erroneously claimed that the CFPB is unconstitutional and unaccountable and have even gone so far as to attempt to eliminate the agency altogether.
Our constituents disagree. A recent bipartisan poll found that 82 percent of Americans, including 77 percent of Republicans, support the CFPB and its mission.
I will highlight three main points about the CFPB small business lending rule that this resolution would repeal. First, the data collected under the rule is very similar to data collected under the Home Mortgage Disclosure Act or HMDA.
This data collection under HMDA has been going on for decades, successfully bringing much needed transparency to the mortgage market. Despite misleading claims by Republicans, I want to be very clear that small businesses are not--are not--are not required to provide demographic information about their ownership under the rule. It is completely voluntary.
I have to repeat that because too many on the opposite side of the aisle are telling people that it is a mandate. It is not. It is voluntary.
Second, this rule will help all small businesses thrive by providing greater transparency that will drive competition in the small business lending market ultimately increasing access to credit and lowering interest rates for small businesses.
Third, as I mentioned earlier, we have seen how HMDA data from mortgages have been instrumental to identifying discriminatory trends like modern-day redlining. The CFPB's rule would similarly help prevent discrimination in the small business lending market, giving our regulators and the public another tool to identify discriminatory trends.
Many of us also recall the challenges that too many small businesses faced during the COVID-19 pandemic. Unfortunately, when Congress stepped in to provide relief through the Paycheck Protection Program, or PPP, the big banks that were tasked with implementing the program chose to prioritize their concierge clients, including some Members of Congress, leaving small businesses, especially those owned by people of color, out in the cold.
It is perhaps not a coincidence that the same big banks who misused PPP to the detriment of small businesses during the early stages of the pandemic are now pushing for the passage of this Senate Joint Resolution 32 opposing the CFPB, which would help them continue to operate with a lack of transparency and avoid accountability.
However, the big banks are alone in their support for this misguided resolution. In fact, more than 230 organizations representing small businesses, family farmers, community leaders, and others strongly oppose S.J. Res. 32.
There is a lot of talk in Congress about how we love small businesses, how we support small businesses, but the proof of the pudding is in the eating. Therefore, I urge Members on both sides of the aisle to actually do something to help small businesses.
Stop talking about how you support small businesses when you know they need access to capital that they don't have. We want to do something real for small businesses. If you do, vote down this harmful resolution.
BREAK IN TRANSCRIPT
Ms. WATERS. Madam Speaker, I yield such time as she may consume to the gentlewoman from New York (Ms. Velazquez), the ranking member of the Small Business Committee who has been working on the Small Business Committee for over 30 years and served as the chair before the last election and who has been fighting for small businesses all of her career.
BREAK IN TRANSCRIPT
Ms. WATERS. Madam Speaker, I yield 1 minute to the gentlewoman from Ohio (Mrs. Beatty), who is also the ranking member of the Subcommittee on National Security, Illicit Finance, and International Financial Institutions.
BREAK IN TRANSCRIPT
Ms. WATERS. Madam Speaker, I yield an additional 1 minute to the gentlewoman from Ohio.
BREAK IN TRANSCRIPT
Ms. WATERS. Madam Speaker, let me just say to the gentleman, your arguments show that you are here to support the big banks who do not want small business in the banks. They don't want to be bothered. As a matter of fact, you try to be convincing that it is not voluntary, but it is voluntary.
They are asked: Do you want to give this information? It is voluntary, and you can't get away from that.
Madam Speaker, I yield 2 minutes to the gentlewoman from Texas (Ms. Garcia), who is also the vice ranking member of the Committee on Financial Services.
BREAK IN TRANSCRIPT
Ms. WATERS. Madam Speaker, I yield an additional 1 minute to the gentlewoman from Texas.
BREAK IN TRANSCRIPT
Ms. WATERS. Madam Speaker, I yield 3 minutes to the gentlewoman from Michigan (Ms. Tlaib), the vice ranking member of the Subcommittee on Housing and Insurance, who has been working on this issue for a long time.
BREAK IN TRANSCRIPT
Ms. WATERS. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, we have these Members on the opposite side of the aisle spending all of this time supporting the biggest, most profitable banks in the country, yet these Members won't stand up for small business lending. They don't want the data so that we can understand what is going on and why people in this country, minorities in particular, farmers, small farmers, family farmers, et cetera, can't get loans.
In the last decade, these megabanks made so much money: J.P. Morgan, $215 billion; Wells Fargo, $197 billion; Bank of America, $105 billion; Citigroup, $93 billion. They repeatedly broke the law, even though they were making all of this money. I want you to know they consider this just the cost of doing business.
We have even more here when we take a look at some of the other banks that paid fines instead of lending money. They would rather pay fines instead of lending to small businesses. What kind of fines are we talking about here? We fined them for all kinds of fraudulent activity.
In the last decade, megabanks made so much money, and then they repeatedly paid fines. For example, the Bank of America paid $66 billion in fines. They could have been lending this to small businesses. J.P. Morgan paid $43 billion in fines. They could have been lending this to small businesses. Citigroup paid $19 billion in fines. They could have been lending this to small businesses. Wells Fargo paid $12 billion in fines.
Some of our Members want to say that we just want to shame these big banks. Yes, I do because it is a shame that they are so profitable that they do not want to spend time with small businesses. It takes up too much time. Small businesses don't earn as much money for the bank, et cetera. They don't even want them in their banks, and we have to do something about that.
We are shining a light on the existing practices of lenders, and if those lenders are charging minorities and small family farmers, et cetera, exorbitant interest rates, there is no reason that we should not get the transparency that we need to stop this.
I will tell you, one of the reasons you hear us being so passionate over here is because the big banks don't need you to defend them. They don't need you to stand up for them. You should be putting your time and effort into what you can do about the small businesses.
I am not going to go into a lot of information. We have Members on the opposite side of the aisle who felt they needed capital. When we did PPP, they came to the government, competing with real small businesses that could not get capital. Not only did they take out the money, but they have been forgiven for it. They didn't have to pay it back.
I am not going to talk about everybody, but I am going to mention Marjorie Taylor Greene because she is everywhere talking about everybody, claiming she is for small business. She took out $180,000, and she has been forgiven.
I am not going to talk about the rest of them, some of my friends over there, but I have a whole list of Members on the opposite side of the aisle who took out PPP money and didn't need it, some of them as rich as cream. They took this money, and they are not paying it back. Then, they come in here and talk about why we should not have transparency and do everything that we can for these small businesses that are desperate for capital.
You can sing the song that you love small business all that you want. You can have the Small Business Saturday with a big, fake kind of operation on small business lending in your community, but it doesn't do any good if they don't get the capital. They need the money. They need to be treated fairly.
Yes, I want to shame the big banks. I want to shame them. You have one of these banks that even took out false accounts, made up accounts, and we had to stop them. We fined them, but do you know what? They are too big to fail, and they keep doing what we are fining them for.
BREAK IN TRANSCRIPT
Ms. WATERS. Madam Speaker, I yield myself such time as I may consume.
Yes, I am a political activist. I am an activist for the people who send us here to represent them. I am an activist for the least of these. I am an activist for small business. I am an activist for veterans. I am an activist for children. I am an activist for education, for better healthcare, and I am very proud of it.
I tell you, it is shameful for us to continue to be dominated and controlled by the biggest banks in America, taking time on the floor of the people's House to defend them and to vote against the very people who send you to this House to represent them. It is absolutely shameful.
It is time to get out from under the influence and control of the biggest banks in America and stand up for the people who really need to make these banks do what they should be doing rather than saying: No, we are not going to comply with the law, and yes, we will pay the fines because we are rich. We have so much money we can do that.
BREAK IN TRANSCRIPT
Ms. WATERS. Madam Speaker, I yield myself the balance of my time for closing.
When we started this debate, I mentioned ReShonda Young, who happens to be a young, Black woman from Waterloo who had many challenges getting a small business loan and sued the CFPB to complete the section 1071 rule. After CFPB settled the case with her, Ms. Young said: ``I am just humbled to be part of the process. Sometimes we feel so small, but this is one of those things that shows if we are willing to speak up, we actually can make a difference.''
Ms. Young has since sold her business and is now working with other investors to try to open up the first minority bank in Iowa, with the goal of being certified as a CDFI, offering the kind of small business loans to others that she had such a time obtaining.
Let me just tell you something. We support CDFIs, the community development financial institutions. Why do we support them? Because they could not get loans from the banks in America. Here we are, the taxpayers, further trying to help small businesses by supporting these community development financial institutions. They were developed because small businesses couldn't get loans.
Then, on the opposite side of the aisle, we have people who are opposing how we can support these small businesses by getting the transparency that we need to have done. They would rather support the biggest banks in America and have the taxpayers try to do something about small businesses with CDFIs than give their small businesses an opportunity.
I tell you, I don't know how they are going to vote on the other side, but this issue is not going to go away. I tell you that the constituents are going to learn in this country who is supporting small businesses. All of this talk and this rhetoric about ``I love small businesses,'' ``I support small businesses,'' will not continue to work.
The fact of the matter is, small businesses are shutting down, closing, because they don't have access to capital.
For all those Members on the opposite side of the aisle who took out PPP loans that have been forgiven, you ought to be ashamed and not oppose the CFPB from trying to protect these small banks, as the courts have told them to do.
Madam Speaker, there is a lot more that can be said. We are going to continue to unveil this information about who is simply spouting rhetoric and who is actually doing something for small businesses.
It is unfortunate that we have to fight this hard. We have to do everything that we possibly can because the banks don't want them in their banks. They don't want to be bothered with them. They are too small.
We have small businesses who only need $50,000 or $75,000 to improve their technology to take their businesses to a place where they can earn more money.
We can't even start to talk about startup capital. None of them get startup capital. If they are able to convince anybody for a little capital to expand their businesses, they will do that. Otherwise, small businesses do not have the support of the Republicans in the House of Representatives as it is seen here today.
Madam Speaker, I yield back the balance of my time.
BREAK IN TRANSCRIPT
Ms. WATERS. Madam Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
BREAK IN TRANSCRIPT
Source