U.S. Representatives Robert Pittenger, R-N.C., and Denny Heck, D-Wash., introduced HR 4383 in the House on April 3. The bill, titled the “Bureau of Consumer Financial Protection Small Business Advisory Board Act,” will establish a small business advisory board to help advise the bureau.
HR 4383 mandates that the director of the Consumer Financial Protection Bureau (CFPB) will create a small business advisory board to provide feedback on the impact new regulations have on smaller companies and provide information on emerging practices that concern small businesses.
“As a former small business owner, I understand the frustration of watching Washington bureaucrats make rules that needlessly and negatively impacted my business,” Pittenger said. “This common sense, bipartisan legislation will give small business owners a seat at the table.”
Pittenger said that small businesses have no regular advocate at the CFPB. If passed, this bill will provide representation for smaller companies.
“Small businesses create jobs, and we need to ensure that small business owners aren’t unnecessarily burdened by mindless regulations or rules that were designed for ‘too-big-to-fail’ banks,” Pittenger continued.
The advisory board would be similar to those established by the CFPB for outreach to community banks and credit unions. It would consist of at least 12 members who can be mortgage brokers, loan officers, appraisers, realtors, title insurers, accountants and other financial service providers.
The members will be appointed by the CFPB director, and the board will be required to meet twice a year.
“Consumers, banks and credit unions already provide valuable insight on what the CFPB proposes, but the smaller operators in finance have a tougher time being heard,” Heck said. “As a small business owner myself, I know local financial service providers in Washington state can partner with the CFPB to better protect consumers and give input on how CFPB actions affect customers and operations.”
The American Land Title Association (ALTA) applauded the introduction of the bill.
“Feedback from the small business community is critical when new regulations are introduced by the CFPB,” said Michelle Korsmo, chief executive officer of ALTA. “When small businesses attempt to comply with regulations, open lines of communication from advisory panels ensure that businesses don’t have to shoot in the dark as they invest in systems and processes to protect consumers.”
Korsmo urged the House of Representatives and the House Financial Services Committee to consider the bill as soon as possible.
“ALTA strongly supports the small business provisions in the Dodd-Frank Act, including [Small Business Regulatory Enforcement Fairness Act] panels that are convened when a proposed regulation is expected to have a significant impact on a substantial number of small entities,” Korsmo said. “However, these panels are a one shot event that comes late in the regulatory process. A more effective process would be to have the bureau consult with small businesses throughout the entire regulatory process.”