Consumer Financial Protection Bureau: We Won't Hurt Small Business
August 1, 2011
As part of their ongoing efforts to limit the Consumer Financial Protection
Bureau's power, Republicans in Congress are warning that the agency could hurt
small businesses. Last week, a congressional subcommittee grilled Dan Sokolov,
deputy director of the bureau's research department, on whether the new agency
will hurt the ability of small businesses to offer consumers credit and obtain
credit themselves. Sokolov said the Dodd-Frank financial reform act specifically
limits the new agency to regulating only large banks, as well as the largest
companies in non-bank financial sectors like payday lenders and prepaid debit
cards. The law specifically bars the CFPB from writing rules concerning small
companies like car dealers; and while the bureau's rules will apply to community
banks, it is not allowed to bring enforcement actions against them. The bureau
is focused "on financial products and services for consumers," Sokolov
testified. "The [CFPB] does not have jurisdiction over small business credit
except in limited cases where Congress has explicitly and affirmatively granted
the Bureau such jurisdiction."
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