Rules developed by the Consumer Financial Protection Bureau will inevitably have an impact on access to capital for small business, according to Rep. Jason Altmire (D-Penn.).
Altmire, who serves as the ranking member of the House Subcommittee on Investigations, Oversight and Regulations, used Thursday’s hearing on the CFPB’s impact on small business to warn the bureau that neglecting small business needs while developing new rules could further worsen the current credit shortage these firms face.
Nearly half of all small firms used personal credit cards to finance their enterprise and one in five entrepreneurs use a home equity loan for business purposes, Altmire said.
Altmire said some small businesses have already been excluded from certain CFPB regulations and that the Regulatory Flexibility Act and the Small Business Regulatory Enforcement Fairness Act allow small businesses to participate in the bureau’s rulemaking process.
As the bureau officially assumed its duties last week, Altmire said now is an ideal time to review and take stock on how the new regulations will affect small businesses.
“By a three to one margin, Americans want financial firms held accountable and financial reforms to take place as soon as possible. The question facing regulators and Congress is not whether this should be done, but how it can be most effective,” Altmire said. “If done properly, this agency can make the entire financial system more stable and safer for small firms that depend on the flow of credit to expand and create jobs."