Consumer Financial Protection Bureau Targeted in Name of Small Business Despite Importance for Stabilizing Local Economies, Customer Base
Published in Business for Shared Prosperity
Washington, DC, July 28, 2011 – This afternoon, the House Small Business Committee Subcommittee on Investigations, Oversight and Regulations will hold a hearing entitled, “Open for Business: The Impact of the CFPB on Small Business.”
Though the new Consumer Financial Protection Bureau (CFPB) has only been open for one week, the hearing appears geared toward the premise that the new bureau is hurting small businesses, a refrain used repeatedly by opponents of the CFPB in the debate over the Dodd-Frank financial overhaul in 2009-2010.
A range of business networks including the Main Street Alliance, Business for Shared Prosperity, and the American Sustainable Business Council contest this premise, and support the CFPB as a critical mechanism to establish and enforce fair rules of the road in the financial marketplace, safeguard economic stability, and leave more money in customers’ pockets to spend in their local economies.
A recent poll confirmed that by a 3 to 1 margin Americans want financial firms held accountable and financial reforms to take effect as soon as possible and they support the CFPB. This echoes the findings of a January 2010 survey report, where the Main Street Alliance found in a survey of small businesses across 13 states that 67 percent of responding business owners supported the creation of the consumer bureau, while only 12 percent opposed it.
While many small business owners view the CFPB as an opportunity to level the playing field for financial consumers, it has become a flashpoint in an intense lobbying effort by Wall Street banks and financial industry special interests. 44 Senators have now said they will obstruct the CFPB’s work by refusing to consider any nominee to direct it unless the bureau is dramatically weakened.
Spokespeople from BSP, MSA, and ASBC gave the following statements today commenting on the debate over the CFPB:
Lew Prince, owner of Vintage Vinyl in St. Louis, MO and a leader inBusiness for Shared Prosperity: “Being against the Consumer Financial Protection Bureau is like being against food safety enforcement. We need the Consumer Financial Protection Bureau to protect us from the kind of reckless and deceptive lending that poisoned our economy, killing small businesses, jobs and the American dream for millions of Americans. As Tom Waits put it so eloquently, ‘The large print giveth and the small print taketh away.’ That’s what the CFPB is designed to stop. Members of Congress should help the CFPB do its job, not obstruct it.”
Jacqueline Germany, owner of Nina’s Nuances Interior Design in West Orange, NJ and a leader with the Main Street Alliance: “Hearings like this one are based on the premise that the Consumer Financial Protection Bureau will hurt small businesses. Nothing could be further from the truth. Small businesses have been devastated by the economic consequences of Wall Street recklessness and abusive lending, with the recession leading to small-business bankruptcies nearly doubling between March 2008 and March 2009. And small businesses are especially hurt when dollars that our customers and prospective customers could be spending on the goods and services we offer are instead sucked away by bad mortgages, deceptive credit cards, or outrageous overdraft fees. That’s why we support the consumer bureau.”
Frank Knapp, President and CEO, South Carolina Small Business Chamber of Commerce and leader with the American Sustainable Business Council: “Small businesses are also consumers who need financial product protection, especially since many entrepreneurs use their credit cards to operate their businesses because they can’t get access to credit in other ways. Statements that the new regulations under Dodd-Frank and the CFPB are hurting small businesses’ ability to obtain loans are simply unfounded, and we would hope that this committee would work with us to solve the real causes of lack of access to capital.”
The American Sustainable Business Council is a growing coalition of business networks and businesses representing over 100,000 businesses and more than 200,000 entrepreneurs, owners, executives, investors and business professionals, committed to advancing a new vision, framework and policies that support a vibrant, equitable and sustainable economy. www.asbcouncil.org
Business for Shared Prosperity is a network of forward-thinking business owners, executives and investors. Hundreds of business organizations and small business owners across the country signed the Business for Shared Prosperity statement supporting creation of the Consumer Financial Protection Bureau as an essential part of financial reform. www.businessforsharedprosperity.org
The Main Street Alliance is a national network of state-based small business coalitions. The Alliance creates opportunities for small business owners to speak for themselves, advancing public policies that are good for small businesses, their employees, and the communities they serve. www.mainstreetalliance.org