A partial repeal of the Dodd-Frank Act, which impedes small business lending, has passed the House and is now in the Senate.
The Dodd-Frank Act, financial legislation passed in 2010, has become a damaging regulation for small business. Dodd-Frank imposes restrictions on community banks—which handle a significant portion of small business lending—and thereby makes it more difficult for small business owners to obtain credit, according to NFIB.
But this June, the House passed the Financial Choice Act, which aimed to reverse segments of Dodd-Frank regulation in order to give small businesses more lending opportunity. Now that the bill is in the Senate, NFIB is working to convince legislators that repealing Dodd-Frank will boost the small business economy.
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Dodd-Frank was intended to level the playing field for banks and encourage competition and innovation, but instead created more headaches for many banks to offer small businesses capital and credit. Now, banks have less flexibility to help out struggling businesses because of a compliance burden that makes the loan investment look risky and unprofitable, according to Columbia Business Report.
NFIB’s most recent Small Business Problems and Priorities report found that the second largest concern for small business owners is “unreasonable government regulations.” Small business owners need legislators to understand the impact regulations such as those required by Dodd-Frank have on their business and the nation’s economic growth.
Fortunately, President Trump and many key legislators have spoken out in support of repealing parts of Dodd-Frank through the Financial Choice Act, according to The Hill.
“With the Financial Choice Act, we will unleash America’s economic potential and give Main Street job creators desperately needed help so more Americans can find work, have good careers and give their families a better life,” said Rep. Jeb Hensarling, a sponsor of the bill.
It’s in Congress’ hands to remove the weight of Dodd-Frank from small businesses and banks. NFIB and small business owners will continue to hold Congress accountable for necessary regulatory relief.
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