(847) 690-9454 info@leifjensenassoc.com

Federal Financial regulators want more data on lending by banks to small firms. Forcing those same small firms to provide more and more information to get access to cash to grow their businesses.

The Consumer Financial Protection Bureau is proposing a rule that it says will “help” fight discrimination in the $1.4 trillion small-business lending market. The proposed rule would require financial institutions to collect and report data on loan applications from small businesses, including demographic and pricing data.  Most of my clients do not track that information, so help may not be the correct term.The rule would apply to lenders that originate 25 or more small-business loans a year. Expect banks and nonbank lenders to push back at the rules, arguing that they’ll have to build entirely new application and reporting systems at a hefty cost.

The reporting requirements would apply to a wide range of credit products, including term loans, lines of credit, credit cards and merchant cash advances.

Small businesses need easier access to loans and cash, not report everything to the government to benefit the larger companies who will get access to this information.

I know I do not collect demographic information on my clients. I don’t know their ethnicity, nor do I care, nor do I require them to show educational degrees.  I know how old they are, and I know their names and addresses.  That allows me to help them legally reduce their taxes.

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