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Small Business Credit Availability Act eases small banks’ Dodd-Frank burden

Small Business Credit Availability Act eases small banks’ Dodd-Frank burden

A recent survey of the Federal Reserve indicated an increased demand for business lending.  In response, there seems to be a slight easing of standards by the big banks in order to remain competitive in the commercial financing arena.  Small banks and non-bank lenders have entered the game in droves, giving more options to businesses looking for capital.  Small businesses are all too often overlooked by the big banks and do not have enough access to competitive, alternative loans.  A new bill, known as the Small Business Credit Availability Act, makes it easier for small business to access credit in their own communities so they do not have to turn to the larger, more national banks for commercial financing which have tighter credit standards are more removed from the needs of  local businesses.


Source:, April 26 2012, by Alexandra Villarreal

The House of Representatives approved H.R. 3336 on Monday, which extends exemptions from the regulatory burden of the 2010 Dodd-Frank Act to credit unions, community banks and other smaller financial institutions.

Rep. Vicky Hartzler (R-Mo.), the sponsor of the bill, also known as the Small Business Credit Availability Act, explained the importance of amending Dodd-Frank to minimize the reform legislation’s unintended negative impact on small-town America, Agri-Pulse reports.

“The current law stifles the [h]eartland,” Hartzler said, according to Agri-Pulse. “Small businesses in rural America should be able to access credit in local communities without the need to turn to national banks that are not familiar with the needs and concerns of this part of the country.”

Supporters of the legislation contend that while the increased regulation of large financial institutions is necessary due to the risk posed to the U.S. financial system, the same rules are not needed for smaller institutions.

“Although Dodd-Frank was supposed to reduce the power of big banks, it has actually had the exact opposite effect,” Hartzler said, The Hill reports. “My bill helps to reverse this trend and keep lending decisions closer to home.”

Hartzler further explained that the bill would increase the ability of small businesses to attain credit within their communities.

“This revision of Dodd-Frank is essential to farmers, manufacturers and small and rural businesses wanting to expand and create new jobs,” Hartzler said, according to The Hill. “Many of these businesses are often overlooked by large national banks and might not have access to competitive loans.”