Promoting Fair Lending to Small Businesses Act
Bill: H.R.7351 | Sponsor: Rep. Velazquez, Nydia M. (D-NY)
Policy area: Finance and Financial Sector

Summary:
Promoting Fair Lending to Small Businesses Act
This bill requires the Consumer Financial Protection Bureau (CFPB) to require reports from and conduct periodic examinations of certain nondepository business lenders. Specifically, the CFPB must assess these lenders' compliance with fair lending laws, obtain information about compliance systems or procedures, and detect risks to small businesses and to minority- and women-owned businesses. Under the bill, nondepository lenders include financial institutions that are not banks or credit unions but that are required to report under certain fair lending laws.

To amend the Consumer Financial Protection Act of 2010 to provide for 
   the supervision of nondepository persons offering or making small 
                business loans, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Promoting Fair Lending to Small 
Businesses Act''.

SEC. 2. SUPERVISION OF NONDEPOSITORY PERSONS OFFERING OR MAKING SMALL 
              BUSINESS LOANS.

    (a) In General.--The Consumer Financial Protection Act of 2010 (12 
U.S.C. 5481 et seq.) is amended by inserting after section 1024 the 
following:

``SEC. 1024A. SUPERVISION OF NONDEPOSITORY PERSONS OFFERING OR MAKING 
              SMALL BUSINESS LOANS.

    ``(a) Definitions.--In this section:
            ``(1) Covered nondepository lender.--The term `covered 
        nondepository lender' means a financial institution (as defined 
        under section 704B(h) of the Equal Credit Opportunity Act (15 
        U.S.C. 1691c-2(h))) that--
                    ``(A) is not a depository institution or credit 
                union; and
                    ``(B) is required to compile, maintain, and report 
                information pursuant to section 704B of the Equal 
                Credit Opportunity Act (15 U.S.C. 1691c-2).
            ``(2) ECOA terms.--The terms `minority-owned business', 
        `women-owned business', and `small business' have the meaning 
        given those terms, respectively, under section 704B(h) of the 
        Equal Credit Opportunity Act (15 U.S.C. 1691c-2(h)).
    ``(b) Supervision.--
            ``(1) In general.--The Bureau shall require reports and 
        conduct examinations on a periodic basis of covered 
        nondepository lenders for purposes of--
                    ``(A) assessing compliance with the requirements of 
                the Equal Credit Opportunity Act (15 U.S.C. 1691 et 
                seq.);
                    ``(B) obtaining information about the activities 
                and compliance systems or procedures of the covered 
                nondepository lender; and
                    ``(C) detecting and assessing risks to minority-
                owned businesses, women-owned businesses, and small 
                businesses and to markets for credit to such 
                businesses.
            ``(2) Risk-based supervision program.--The Bureau shall 
        exercise its authority under paragraph (1) in a manner designed 
        to ensure that such exercise, with respect to covered 
        nondepository lenders, is based on the assessment by the Bureau 
        of the risks posed to minority-owned businesses, women-owned 
        businesses, and small businesses in the relevant product 
        markets and geographic markets, and taking into consideration, 
        as applicable--
                    ``(A) the asset size of the covered nondepository 
                lender;
                    ``(B) the volume of transactions involving 
                extending credit to minority-owned businesses, women-
                owned businesses, and small businesses in which the 
                covered nondepository lender engages;
                    ``(C) the risks to minority-owned businesses, 
                women-owned businesses, and small businesses created by 
                the provision of such credit;
                    ``(D) the extent to which the covered nondepository 
                lender is subject to oversight by State authorities for 
                fair lending in the provision of such credit; and
                    ``(E) any other factors that the Bureau determines 
                to be relevant to a class of covered nondepository 
                lenders.''.
    (b) Clerical Amendment.--The table of contents in section 1(b) of 
the Dodd-Frank Wall Street Reform and Consumer Protection Act is 
amended by inserting after the item relating to section 1024 the 
following:

``Sec. 1024A. Supervision of nondepository persons offering or making 
                            small business loans.''.
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