The proposed implementation of Section 1071 of the Dodd-Frank Act, which requires reporting of detailed data on small business lending, will have far-reaching implications for how lenders approach their small business credit decisions, according to a new staff analysis published by ABA’s economic research team. The analysis notes that while promoting access to capital to minority and women-owned small businesses is a worthwhile public policy goal, it is increasingly evident that achieving that goal through regulatory reporting would simultaneously increase borrowing costs for all small businesses.

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The staff analysis illustrates the importance of a dynamic banking system for small-business lending, examines deficiencies in the bureau’s 1071 regulatory analysis, and warns of some of the unintended consequences associated with this rulemaking.

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With the House scheduled to markup a Congressional Review Act resolution condemning the CFPB’s Section 1071 rulemaking today, ABA urges bankers and their small-business customers to submit letters in support of the resolution. The association also sent its own letter of support for the resolution to House Financial Services Committee leaders yesterday ahead of the markup.

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