CFPB Director Kraninger Addresses Small Business Lending Concerns

Wednesday, the Consumer Financial Protection Bureau (Bureau) held a symposium focused on Section 1071 of the Dodd-Frank Act, which requires the bureau to collect data related to small business lending.  Bureau Director Kathy Kraninger’s remarks acknowledges these concerns as she emphasized the need to better understand small business lending.

Director Kraninger spoke about small businesses, including those owned by women and minorities, that are critical engines for economic growth. According to the Census Bureau, there are more than 27.6 million small businesses in the United States. More than 7.9 million of these businesses are minority-owned and over 9.8 million are women-owned and the importance for these businesses to have access to financing.

Kraninger acknowledged, access to financing is a crucial component of the success of these businesses. To contribute meaningfully to the U.S. economy, small businesses -- including minority and women owned small businesses -- need access to credit to smooth out business cash flows and to enable entrepreneurial investments that take advantage of, and sustain, opportunities for growth.  

The Bureau understands that the market these businesses turn to for credit is vast and complex.  Small businesses have many different options when it comes to financing, including products and providers. Using publicly available data and informed by conversations with market participants, the Bureau estimates the small business financing market is roughly $1.4 trillion in size. 

Section 1071 would increase public data about small business lending. Congress wanted the Bureau, and the public generally to better understand the landscape for all small businesses, and specifically those owned and operated by women and minorities. And the law specifically directs the Bureau to develop a rule for the collection, reporting, and publication of certain data.  

Read Director Kraninger’s full remarks.