WASHINGTON, DC (March 28, 2023) – A central Pennsylvania community banker today warned a congressional subcommittee that proposed rules governing small business lending could threaten small business privacy and reduce access to capital.
Troy A. Peters, President & CEO of Jonestown Bank & Trust Co. of Jonestown, PA, testified today on behalf of the Pennsylvania Association of Community Bankers before the United States House of Representatives Small Business Committee and Subcommittee on Economic Growth, Tax, and Capital Access, chaired by US Rep. Dan Meuser (PA-9).
The hearing focused on the Consumer Financial Protection Bureau’s (CFPB) proposed rule regulating data collection and reporting requirements of Section 1071 of the Dodd-Frank Act and the effects it will have on community banks’ ability to meet the unique needs of local small businesses.
In his testimony, Peters noted that community banks are “different than large banking institutions that operate under a contrasting business model that focuses on large companies and loan sizes,” and noted that, “We intimately know our markets and our customers.”
“Small-business loans are by their very nature not cookie cutter,” Peters continued. “They are tailored to the specific business’ needs.
“Making application and loan data public as proposed will certainly be objectionable to my clients and is quite concerning. By publicly displaying sensitive information like how much money they applied for, what the purpose of the loan is, and their revenue number, is not the kind of information they want or expect to be made public from a private transaction. This disclosure could also create a competitive disadvantage for them, such as revealing a planned business investment.
“Even worse, publishing information that a sole proprietor’s loan request was denied, in a small community like ours, is akin to posting a bounced check to the wall behind the store cash register. The public humiliation shouts ‘don’t do business with this person, they’re a deadbeat!’
“I feel like this rule … will not be in the best interest of my clients and the communities that we serve,” Peters added.
PACB Banker Testifies Before Congress on CFPB’s Proposed 1071 Rule (Pg 2)
“Community Banks are vital to small businesses across the Commonwealth, and I was pleased to have had the opportunity to invite a member of the Pennsylvania Association of Community Bankers to testify before my House Small Business subcommittee,” US Rep. Dan Meuser said.
“I will continue to fight for community banks, and I appreciate Mr. Peters of Jonestown Bank & Trust expressing his concerns about the CFPB’s proposed rule on new data collection. I greatly valued his insight, as did the entire committee. We cannot allow burdensome federal regulations and mandates to harm banks that play such an important role in providing access to capital and supporting Pennsylvania’s small businesses.”
###
About the Pennsylvania Association of Community Bankers
PACB is a statewide trade association that seeks to empower community banks to make a positive impact on the communities they serve. To learn more about PACB visit www.pacb.org.
not secure