# What This Bill Actually Does

This bill would eliminate a federal requirement that banks and lenders report detailed information about their small business loans. Right now, financial institutions have to collect and submit data about who they're lending to for small business purposes—information like the borrower's race, ethnicity, gender, and other demographic details, along with loan amounts and terms. This requirement came from a 2010 financial reform law called Dodd-Frank. The new bill would simply delete this reporting requirement entirely.

The supporters of this bill argue that collecting and reporting all this data costs banks money and creates unnecessary paperwork, especially for smaller community banks and credit unions. They claim these compliance costs make banks less willing to lend to small businesses because they're spending resources on paperwork instead of making loans. By eliminating the requirement, they believe banks will have more money and motivation to lend to small business owners who need it.

However, there's an important trade-off here. Right now, regulators and researchers use this loan data to spot patterns of discrimination in lending—to see if certain groups of people are being denied loans or charged higher rates unfairly. Without this data collection, it becomes much harder to detect whether discrimination is happening in small business lending. Consumer advocates worry that removing this transparency tool could allow unfair lending practices to go undetected. So while small business owners might theoretically benefit from easier access to credit, the downside is losing a way to monitor whether that credit is being offered fairly to everyone.

1071 Repeal to Protect Small Business Lending Act

Williams, Roger

1071 Repeal to Protect Small Business Lending ActThis bill repeals the statute that requires financial institutions to collect data regarding applications for women-owned, minority-owned, or small business loans. Currently, financial institutions must collect and report to the Consumer Financial Protection Bureau information on (1) how many applications were received; (2) the disposition of each application; (3) the type of loan; (4) the amount applied for; (5) the amount approved; and (6) each applicant’s census tract, revenue, race, sex, and ethnicity.