The U.S. small business community on Tuesday wrote to lawmakers urging them to step up efforts to roll back regulation introduced in the wake of the 2007-09 financial crisis that they say has stymied lending, dampening economic growth and job creation.
The letter, sent to all U.S. Congressmen by more than 100 state and local chambers of commerce and seen by Reuters, highlights frustration among Main Street businesses which have yet to benefit from President Donald Trump’s pledge to ease access to credit by slashing financial rules.
Extra bank capital and liquidity requirements introduced by the 2010 Dodd-Frank law have slowed the flow of credit and seen many services and products for small businesses eliminated, the chambers wrote, citing Federal Reserve and Federal Deposit Insurance Corporation data.
“We believe Congress should develop common-sense reforms for community, mid-size and regional banks, which would help empower Main Street businesses. We urge you to make such legislation a priority,” the chambers wrote.
The letter is likely to increase pressure on Democrats in the Senate to support a bipartisan bill unveiled by the Republican-led Senate Banking Committee on Monday that would offer some relief to community and regional banks by reducing the threshold at which they are considered systemically risky.
That bill, which marks the first concrete congressional step toward rolling back Dodd-Frank, has nine Democratic co-sponsors, but Republicans will need to win over a handful of extra Democratic votes to be certain of its passage.
Talks on the bill have dragged on for months, with Democratic lawmakers wary of appearing to offer handouts to big Wall Street banks. But they are growing more sympathetic to the idea of relaxing rules for small and regional lenders in order to make life easier for small businesses and entrepreneurs – especially with mid-term elections in 2018 looming, lobbyists said.
David Hirschmann, president and CEO, Center for Capital Markets Competitiveness at the U.S. Chamber of Commerce, which coordinated the letter, said there was a growing “crescendo” among Democratic lawmakers on the regulatory relief issue.
“A year ago with a Democrat president in the White House, you could not get nine Democrats to support even common-sense reforms like this. So what’s changed? Is it because they want to help Trump? No. It’s because they’re hearing about this from home. That’s what’s causing these Democrats to come forward and to say, ‘We need to fix this’,” he said.
“There is a real understanding that if we don’t enable the banks, we are not going to have the small business lending we need. This is not a Wall Street issue; it’s a Main Street issue,” he added.
(Reporting by Michelle Price, editing by G Crosse and Lisa Shumaker)