WASHINGTON (8/13/14)--A new white paper by the National Community Reinvestment Coalition (NCRC) calls for credit unions to be included in expanded small business lending data reporting. The paper is a series of recommendations to the Consumer Financial Protection Bureau, which is developing a regulation to implement Section 1071 of the Dodd-Frank Act.
Section 1071 of Dodd-Frank is meant to facilitate enforcement of fair lending laws, as well as enable the government and financial institutions to identify women-owned, minority-owned and small businesses. The white paper lists several recommendations meant to improve publicly available small business loan data.
According to the NCRC, most of the current publicly available data is submitted by large banks. The coalition recommends data disclosure be expanded to credit unions, as well as smaller banks and non-depository lenders. While credit unions are limited in their business lending to 12.25% of assets, the NCRC recognizes them as an "important source of small business loans."
The National Credit Union Administration's 2013 report states that member business loan balances grew to $45.9 billion in 2013, a 10.1% increase from the year before.
The NCRC recommends the following data elements be required from lenders about small businesses:
In addition to the above required items, the NCRC also recommends several discretionary data elements, including pricing data, creditworthiness, number of employees and loan performance. According to the coalition, this additional data will help identify barriers to credit access.
The NCRC, a nonprofit association of more than 600 organizations with a mission to build and protect wealth in underserved communities, says better data on lending markets will improve access to credit, as well as hold lenders publicly accountable for meeting credit needs.
Use the resource link below to access the white paper.