# Plain Language Summary: Promoting Fair Lending to Small Businesses Act

This bill gives the Consumer Financial Protection Bureau (CFPB) the power to oversee and examine non-bank lenders that make small business loans. Right now, the CFPB mainly focuses on traditional banks and credit unions, but many small businesses actually borrow from alternative lenders like online lending companies, private equity firms, and other financial companies that aren't banks. This bill closes that gap by bringing these non-bank lenders under federal supervision for the first time.

The bill specifically targets how these non-bank lenders treat minority-owned businesses, women-owned businesses, and small businesses in general. The CFPB would be required to regularly examine these lenders to make sure they're following fair lending laws and not discriminating based on race, gender, or other protected characteristics. The agency would also collect information about lending patterns to spot any unfair practices or risks to these business groups. For example, if a non-bank lender is consistently charging higher interest rates to minority-owned businesses or denying them loans at higher rates than other applicants, the CFPB could investigate and take action.

The supervision would be tailored based on risk—meaning the CFPB would focus more heavily on larger lenders that make lots of small business loans, while smaller players might face less intensive oversight. The bill also takes into account whether state authorities are already watching these lenders for fair lending violations. Essentially, this bill aims to ensure that small business owners, particularly those from minority and women-owned communities, have fair access to credit from all types of lenders, not just traditional banks.

Promoting Fair Lending to Small Businesses Act

Velázquez, Nydia M.

Promoting Fair Lending to Small Businesses Act This bill requires the Consumer Financial Protection Bureau (CFPB) to require reports from and conduct periodic examinations of certain nondepository business lenders. Specifically, the CFPB must assess these lenders' compliance with fair lending laws, obtain information about compliance systems or procedures, and detect risks to small businesses and to minority- and women-owned businesses. Under the bill, nondepository lenders include financial institutions that are not banks or credit unions but that are required to report under certain fair lending laws.