ABC May 21 criticized the Restoring American Financial Stability Act of 2010 (S. 3217), which passed the Senate May 20 by a vote of 59 to 39, while applauding a bi-partisan amendment to the bill.
The financial reform bill establishes a Consumer Financial Protection Bureau (CFPB) which will oversee lending. The Small Business Fairness and Regulatory Transparency Amendment (S. Amdt. 3883), introduced by Sens. Olympia Snowe (R-Maine) and Mark Pryor (D-Ark.), will ensure small businesses would be active participants in the CFPB regulatory process. The amendment will require the CFPB to issue a small business impact statement, including recommendations from a small business panel, when rules are proposed.
“ABC has voiced strong opposition to the financial reform bill because it creates a Bureau of Consumer Financial Protection with new regulations, enforcement authority and supervisory requirements, adding to the already formidable federal government bureaucracy,” said Geoff Burr, ABC vice president of federal affairs. “We are pleased that the Snowe/Pryor amendment ensures that this new agency cannot regulate with carte blanche authority. At a minimum, small businesses will now have a seat at the table.”
Before the vote, ABC
sent a letter to Sens. Chris Dodd (D-Conn.), chairman of the Senate Committee on Banking, Housing and Urban Affairs, and Richard Shelby (R-Ala.), ranking member of the committee, expressing support for the Snowe/Pryor amendment and opposition to a separate amendment that would have eliminated the requirement for small business impact analysis.
“Rulemakings by federal agencies and the CFPB have the potential to cause severe restrictions in credit and effectively harm small business job creation and economic growth,” said Burr. “This is the last thing small businesses and our struggling economy need. The language creating this new ‘independent’ federal agency is vague as to how many and which small business industries and entities will be regulated under this new bureaucracy.”
The Restoring American Financial Stability Act must now be combined with the House-passed version of financial reform.