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Women in Biz to CFPB: Collect Small Biz Lending Data to Help Women, Minority Biz Access Capital

Monday, September 18, 2017  
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Women Entrepreneurs to CFPB: Collect Small Business Lending Data to Help Women, Minority Business Owners Access Capital

 

Washington, D.C., Sept. 18, 2017 — In response to a call for comments on the small business lending market from the Consumer Financial Protection Bureau, Women Impacting Public Policy (WIPP) submitted a statement supporting the implementation of Section 1071 of the Dodd-Frank Act requiring financial institutions to gather and report data on small business lending, including applications made by women and minority owners.

 

WIPP President Jane Campbell said the data resulting from the implementation of Section 1071 is needed to understand the amount of small business credit flowing into local communities and to clearly outline the unmet credit needs of women and minority entrepreneurs.

 

“By gathering a reasonable about of data, good policy decisions can be made to solve the continued problem of obtaining capital for women and minority-owned businesses,” Campbell wrote in the statement submitted last week.

 

Women-owned businesses are critical to the nation’s job creation and economic growth. Today there are more than 10 million women business owners—more than a third of U.S. businesses—who generate more than $1.4 trillion in revenues and employ 8.4 million people. According to the Guardian Small Business Research Institute, women-owned businesses will create 5 to 5.5 million new jobs by 2018.

 

Access to credit is a key determinant in the formation of small businesses, yet women entrepreneurs lack sufficient access to capital, and lawmakers and regulators lack basic information about the credit needs of women-owned businesses and their ability to obtain credit. Just 5 percent of women-owned businesses use bank loans to start their businesses, compared to 11 percent of male-owned businesses. On average, women start their businesses with half the amount of capital compared to men.

 

“We understand that the lending community has expressed concern that imposing these

requirements will put a further chill on small business lending—an outcome that no one

wants. However, we believe that reasonable requests in this data collection could benefit

everyone. We urge the CFPB to keep it simple so that lenders are not burdened with

onerous paperwork, but rather gather a few data points that could help us get to the

answer of why lending to women is so low,” Campbell said. “Gathering this data will lead to informed policy decisions that can help create a level playing field for women-owned small businesses and allow them to start and grow their businesses and create more jobs.”

 

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About WIPP

Women Impacting Public Policy (WIPP) is a national nonpartisan organization advocating on behalf of women entrepreneurs—strengthening their impact on our nation’s public policy, creating economic opportunities, and forging alliances with other business organizations. www.WIPP.org


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