Small business owners urge consumer bureau to preserve and enforce the rule, protect consumers against payday lending debt trap
WASHINGTON, DC - Congressional Review Act (CRA) resolutions—S.J. Res 56 and H.J. Res 122—to repeal the Consumer Financial Protection Bureau’s (CFPB or consumer bureau) payday and car title lending rule will not advance in Congress, as their legislative clock expired yesterday. The CFPB rule, finalized in October, establishes basic consumer protections on these 300% or more interest loans, including the common-sense standard that lenders should have to verify a borrower’s ability to repay before making the loan. Consumer and civil rights advocates, including the Main Street Alliance, are urging the consumer bureau to keep intact the rule, which is set to into effect summer 2019, and to fulfill the bureau’s responsibility to enforce the law.
The CRA is a fast-track legislative tool that allows lawmakers to undo federal regulations years in the making without public hearings with a simple majority vote in both the House and Senate. If invoked, the CRA prohibits a federal agency—like the consumer bureau—from rolling out regulations substantially the same as those it reversed. Since neither chamber brought the payday rule resolutions to a vote during the limited time allotted for a CRA challenge, the important rule was not overturned.Read more
Small Businesses in Lower-income or Minority Neighborhoods are Less Likely to Receive loans than Businesses in Higher-Income or White Neighborhoods
New report focuses on small business lending landscapes in Detroit, Michigan and Richmond, Virginia
Businesses in low- and moderate-income or predominantly minority areas in Detroit, Michigan, and Richmond, Virginia, are less likely to receive small business loans than businesses in more affluent and more white neighborhoods in those metropolitan areas according to a report that Woodstock Institute released today. The report, “Patterns of Disparity: Small Business Lending in the Detroit and Richmond Regions,” examines bank lending to small businesses in those cities. It is the third in a four-part series of research reports examining small business access to bank loans in eight major metropolitan areas. The report finds:Read more
We come together in the halls of power and across the media as small business owners because we need to grab our good name back from corporations and lobbyists. On issue after issue, we stand for an alternative economic point of view: it’s about community, customer demand, social justice and sustainable business models. While we come together to advocate we are also exploring ways to provide concrete, hands-on assistance to our members.
Our Washington state affiliate has launched a collaboration with the Oakland-based Beneficial State Foundation to tackle the small business issue #1: access to credit.
Over sixty Spokane mom-n-pops and their community allies and customers came out to connect and share ideas about alternatives to big banks and Wall Street who extract wealth from our communities and rig the marketplace against small businesses. Owners of retail stores, restaurants, small manufacturers, dry cleaners, mechanics, IT and health professionals, consultants, artists and everyone in between joined in to brainstorm ways to bring together values-driven lending institutions and good providers of financial know-how assistance and Main Street Alliance members.
Kat Taylor, CEO and Founder of Oakland-based Beneficial State Bank and Foundation, as well as the Bank and Foundation officers, visited Spokane for the occasion and got to hear a range of entrepreneurial experiences with financial institutions. The picture, as you may suspect, is not that pretty, especially for women owners, people of color, immigrants and first-generation entrepreneurs. When it comes to being treated well by the banking industry, every small business has a horror story.
Our goal is to produce a valuable and vetted portal of values-driven lenders and service providers across Washington and beyond and to work actively on connecting them with small businesses. When we strengthen the business operations of our own members, we also strengthen our local economies and our ability to have impact on local and statewide policy debates.
We envision a banking industry that is fair to the person with the least bargaining power, provides access to financial services for all our communities, particularly the under-served. We envision lending institutions that promote the stability of the financial system and contribute to the sustainability of our environmental commons.
In other words, we believe that money should serve people, not the other way around. We call our new project Building Main Street. Let’s build strong local economies, improve quality of life for each of us, and make widespread gains in social equity and environmental renewal. Main Street, not Wall Street.
Here is a little glimpse from Spokane. Stay in touch with our Washington affiliate and let them know what you think.
Business and individuals are fed up with high bank fees and the role large banks played in the financial collapse. You can join them on Nov 5th by closing your account at a big bank and moving it to a community bank or credit union.
Since the financial collapse the "too big to fail" banks have only gotten bigger, risking our economy further. Main Street Alliance members fought back against high interchange fees only to see them shifted to consumers. Small business lending has slowed to a trickle and foreclosures continue to strip wealth from homeowners and devastate communities.
Our partners at New Bottom Line have created a website to help people navigate the process of closing accounts at the big banks and finding a community bank or credit union. There is a page you can use to track how much money has been moved out of the big banks.
The country observed National Small Business Week in May (see the Presidential Proclamation). The Main Street Alliance marked the occasion by releasing its “State of the Small Business Nation – 2011.” This white paper includes a “Small Business Top Ten List” of concrete policy opportunities to level the playing field for small businesses and help them create jobs.
While pundits and politicians like to label policies “pro-business” or “anti-business,” as if there were one unified business interest, the reality is that policies that make winners out of some businesses make losers out of others. As Bruce Josten, the chief lobbyist of the U.S. Chamber of Commerce, put it, “You’re never going to have one hundred percent unanimity. Never. There is inherent tension… I laugh every day when someone calls and asks what does the business community think.” (1)
While Mr. Josten pointed to tensions between oil and gas companies, wholesalers and retailers, investment banks and retail banks – all big corporate players – his point applies even more so to the dynamics between big business and small business. While pundits and politicians like to lump all business interests together, the truth is that policies that benefit large corporate players very often tilt the playing field against small businesses.
In a cover letter to President Obama, senior administration officials, and congressional leaders on May 18, Main Street Alliance business leaders wrote:
Our members come from states across the country and a wide range of sectors, but we are united by a common set of values – small business values. We believe in what we do, we stand by our products and services, and we want people in government and corporate leadership who do the same. We stand for fair play and a level playing field. We stand for having each other’s backs. We believe America’s future prosperity depends on everyone contributing their fair share.
These small business values are what guide our business decisions and our commitment to advancing policies that fulfill the promise of an economy that works for all of us – small businesses, our employees, and the communities that sustain us.
(1) James Verini, “Show Him the Money,” Washington Monthly, July/August 2010, http://www.washingtonmonthly.com/features/2010/1007.verini.html