The Financial Technology Association (FTA) appreciates the opportunity to respond to this request for public comment issued by the Consumer Financial Protection Bureau (the “CFPB” or “Bureau”) regarding a proposed rule amending Regulation B to implement changes to the Equal Credit Opportunity Act (ECOA) made by section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).
The FTA supports the overarching objectives of Section 1071 of the Dodd-Frank Act, specifically the focus on enabling stakeholders to identify better and meet the needs of women-owned and minority-owned small businesses.
Despite multiple interventions over the years, there remain long-standing disparities in access to capital and collateral for minority and women-owned businesses. The COVID-19 pandemic has only exacerbated these disparities, resulting in highly inequitable recovery rates.
In the United States, minority-owned SMBs were more likely to report adverse impacts from the pandemic. Twenty-seven (27) percent of minority-owned small businesses were impacted by pandemic-related closures (that figure increases to 33 percent for Black-owned SMBs), compared to 18 percent for SMBs not owned by minorities. Not only were minority-owned SMBs more likely to report a drop in sales, but the magnitudes of these drops were higher as well.