House Small Business Committee News
The Committee on Small Business will meet for a hearing titled, “American Infrastructure and the Small Business Perspective.” The hearing is scheduled to begin at 11:00 A.M. on Wednesday, March 21, 2018 in Room 2360 of the Rayburn House Office Building.
The Committee will examine the small business perspective of the development and use of our nation’s infrastructure. In particular, the hearing will examine how surface transportation and access to broadband promote economic growth among small businesses. The hearing will also explore some of the challenges that small businesses face without a robust infrastructure system.Attachments
1. Hearing Notice
2. Witness List
Ms. Marsia Geldert-Murphey
Chief Operating Officer
W. James Taylor, Inc.
* Testifying on behalf of the American Society of Civil Engineers
Mr. Doug Boone
Chief Executive Officer
Sioux Center, IA
* Testifying on behalf of NTCA – The Rural Broadband Association
The Committee on Small Business Subcommittee on Contracting and Workforce will meet for a hearing titled, “Workforce Development: Advancing Apprenticeships for Small Business.” The hearing is scheduled to begin at 2:00 P.M. on Tuesday, March 20, 2018 in Room 2360 of the Rayburn House Office Building.
Subcommittee Members will continue the Committee’s exploration of strategies to mitigate small business workforce challenges caused by the skills gap. On February 26, 2018 the Committee held a field hearing, “Workforce Development: Closing the Skills Gap,” which focused on career and technical education programs. This hearing will examine apprenticeship initiatives, specifically the Department of Labor Registered Apprenticeship Program, which combines on-the-job learning and related technical instruction.Attachments
1. Hearing Notice
2. Witness List
Ms. Tammy Simmons
Vice President, Human Resources and Marketing
Machine Specialties, Inc.
Mr. Jeffrey Forrest
Vice President, Economic and Workforce Development
College of the Canyons
Santa Clarita, CA
Ms. Jeannine Kunz
Mr. Jeff Mazur
St. Louis, MO
WASHINGTON - Yesterday, House Small Business Committee Chairman Steve Chabot (R-OH), Senate Small Business and Entrepreneurship Committee Chairman Jim Risch (R-ID), House Ranking Member Nydia Velázquez (D-NY) and U.S. Senator Jeanne Shaheen (D-NH) applauded the passage of their Small Business 7(a) Lending Oversight Reform Act of 2018 from both the Senate and House small business committees. This bipartisan, bicameral legislation will increase the Small Business Administration’s (SBA) oversight authority over the 7(a) loan program and now goes before both bodies for consideration.
“The 7(a) Loan Program remains one of the SBA’s most significant because it fills an important gap for small business owners in need of capital who may be struggling to get it otherwise. Our legislation will allow the SBA to keep a closer watch on the program to make sure it is running effectively, while also continuing to run at a zero cost to taxpayers. The fact that both the House and Senate, and both sides of the aisle, are supporting this legislation is a testament to how critical it is to help the small business owner succeed and grow,” said Chairman Chabot.
“The unanimous passage of this bill from both committees underscores how important the 7(a) program, and the capital it provides, is to our nation’s small business owners,” said Senator Risch. “This bill will ensure SBA has the tools it needs to oversee this growing program, provide lenders with needed clarity, and make sure entrepreneurs and small business owners have access to funds they would otherwise not be able to obtain."
“When it comes to helping entrepreneurs secure reliable capital, the 7(a) program is a linchpin in the small business economy,” said Ranking Member Nydia M. Velázquez (D-NY). “The reforms contained in this bill will help ensure the program operates even better, helping more small firms obtain affordable credit to grow their operations and create jobs. I’m particularly pleased by the provisions in this bill granting SBA flexibility to raise their lending authority cap to avoid the program temporarily going off line when there’s unexpected loan volume. I especially want to thank Chairman Chabot for his leadership and for working in such a collaborative manner on this bill. I also want to applaud Senators Risch, Shaheen and Cardin for making this process both bipartisan and bicameral.”
“Small businesses are the engine that drives New Hampshire’s economy, and the SBA’s 7(a) loan program plays a critical role in providing those businesses with the resources they need to succeed,” said Shaheen. “I’m pleased by the bipartisan and bicameral support for this bill, and will continue to work across the aisle to push forward legislation that helps Granite State business owners access the capital they need to expand their companies and workforce.”
The Independent Community Bankers of America, which represents nearly 5,700 community banks, praised the Committees’ passage of the 7(a) loan program legislation. In a statement, ICBA President and CEO Camden R. Fine said: “ICBA and the nation’s community bankers thank House and Senate policymakers for promoting a robust and sustainable 7(a) program to help small businesses create jobs and strengthen our economy.”
This bill is additionally supported by the National Association of Government Guaranteed Lenders (NAGGL), the American Bankers Association (ABA), the National Association of Federally-Insured Credit Unions (NAFCU), the U.S. Chamber of Commerce, and the Consumer Bankers Association.
The 7(a) loan program is a Small Business Administration (SBA) program that helps entrepreneurs and small businesses access credit to start and grow their businesses when they are unable to get a conventional loan. The Small Business 7(a) Lending Oversight Reform Act of 2018 preserves this important loan program by:
• Strengthening SBA’s Office of Credit Risk Management by outlining in statute the responsibilities of the office and the requirements of its director;
• Enhancing SBA’s lender oversight review process, including increasing the office’s enforcement options;
• Requiring SBA to detail its oversight budget and perform a full risk analysis of the program on an annual basis;
• Strengthening SBA’s Credit Elsewhere Test by clarifying the factors that must be considered.
WASHINGTON— Today, the House Committee on Small Business held a markup to amend the Small Business Act and the Small Business Investment Act. All six bills passed through Committee on bipartisan votes.
H.R. 4743, the Small Business 7(a) Lending Oversight Reform Act, introduced by Chairman Steve Chabot (R-OH)
H.R 4743 amends the Small Business Act to strengthen the Office of Credit Risk Management within the Small Business Administration.
“With the popularity and recent growth of the Small Business Administration’s (SBA) 7(a) Loan Program, this bill will ensure the integrity of the program while protecting taxpayer dollars,” said Chairman Chabot.
Passed by voice vote.
H.R. 3170, the Small Business Development Center Cyber Training Act, introduced by Chairman Chabot
H.R. 3170 amends the Small Business Act to provide cyber certification for Small Business Development Center counselors.
“The ability to withstand a cyberattack in today’s highly technological world is imperative for small businesses. H.R. 3170 is a step in the right direction to ensure that small business owners have access to trained cybersecurity professionals in case they are hacked,” said Chairman Chabot.
Passed by voice vote.
H.R. 4668, the Small Business Advanced Cybersecurity Enhancements Act, introduced by Chairman Chabot
H.R. 4668 amends the Small Business Act to provide for the establishment of an enhanced cybersecurity assistance and protections for small businesses.
“The federal government should work hand-in-hand with small businesses on cybersecurity matters,” said Chairman Chabot. “This bill aims to increase the defensive measures available for small businesses undergoing or concerned about a cyber attack and to incentivize more information sharing between the private sector and the federal government.”
Passed by voice vote.
H.R. 2655, the Small Business Innovation Protection Act, original cosponsored by Rep. Brian Fitzpatrick (R-PA)
H.R. 2655 amends the Small Business Act to expand intellectual property education and training for small businesses.
“Small businesses rely on intellectual property rights like patents, trademarks, and copyrights to protect their ideas and products. These essential property protections promote entrepreneurship and innovation. Unfortunately, many small business owners lack the knowledge, expertise, and resources to secure their intellectual property both here at home and abroad,” said Congressman Brian Fitzpatrick (R-PA). “The Small Business Innovation Protection Act will help small businesses leverage existing educational programs to protect their intellectual property from domestic and international harm. I’m proud to support this common sense measure.”
Passed by voice vote.
H.R. 5236, the Main Street Employee Ownership Act, as well as H.R. 5178, the Puerto Rico Small Business Contracting Act, both introduced by Ranking Member Nydia Velázquez, also passed the Committee today.
To watch the full committee markup, click here.
The Committee on Small Business will hold a markup of legislation to amend the Small Business Act and the Small Business Investment Act. The markup will be held at 11:00 A.M. on Wednesday, March 14, 2018, in Room 2360 of the Rayburn House Office Building. The items that will be marked up include:
- H.R. 4743, “Small Business 7(a) Lending Oversight Reform Act of 2018”
- H.R. 5178, “Puerto Rico Small Business Contracting Assistance Act of 2018”
- H.R. 3170, “Small Business Development Center Cyber Training Act of 2017”
- H.R. 4668, “Small Business Advanced Cybersecurity Enhancements Act of 2017”
- H.R. 2655, “Small Business Innovation Protection Act”
- H.R. 5236, “Main Street Employee Ownership Act of 2018”
1. Markup Notice
Disparities in Access to Capital: What the Federal Government Is Doing to Increase Support For Minority Owned Firms
The Committee on Small Business will meet for a hearing titled, “Disparities in Access to Capital: What the Federal Government Is Doing to Increase Support For Minority Owned Firms.” The hearing is scheduled to begin at 10:00 A.M. on Monday, March 12, 2018 at the Jacksonville Chamber of Commerce, 3 Independent Dr., Jacksonville, FL.
Small businesses owners, particularly women and minorities, face unique challenges when it comes to getting a loan to help them grow and create new jobs. At a time when minority-owned businesses are growing at a faster pace, they still secure financing at much lower levels than many other businesses. Without adequate access to capital, whether microloans, commercial lending, or investment capital, small minority firms cannot compete for government contracts, grow their business, or create jobs in their local communities. The hearing will focus on the challenges they face with Small Business Administration (SBA) lending programs, traditional bank loans, private investment capital, and other alternative financing.Attachments
1. Hearing Notice
2. Witness List
Mr. Jimmy Van Horn
Lead Lender Relations Specialist
United States Small Business Administration
Ms. Hillary Almond
Ms. Roslyn Phillips
The Hester Group
Mr. Dane Grey
Elite Parking Services of America
WASHINGTON – This week, the National Federation of Independent Business (NFIB) announced that its small business optimism index rose in February to its second-highest reading in the 45-year history of the monthly survey.
According to the report:
- Taxes received the fewest votes as the #1 business problem since 2006
- Reports of improved earnings trends were the highest since 1987
- Inventory investment was the strongest since 2000, fueling GDP growth
- Reports of actual capital outlays rose to the highest level since 2004
- Reports of compensation increases held at the highest level since 2000
For the full NFIB Small Business Optimism Index click here.
“Every day we are seeing the positive effects of the historic tax reform package signed into law in December. Our 30 million small businesses are less worried about taxes and more optimistic about the future of their businesses and hiring potential,” said House Committee on Small Business Chairman Steve Chabot (R-OH).
In December, Chairman Chabot praised the passage of the Tax Cuts and Jobs Acts Conference Report.
WASHINGTON – Today, Chairman Chabot (R-OH) released the following statement after the House passed H.R. 1917, the Blocking Regulatory Interference from Closing Kilns (BRICK) Act:
“As Chairman of the Committee on Small Business, I continue to hear from small business owners all across America that compliance with regulations is one of the greatest challenges they face. The regulation at issue in the BRICK Act is one such regulation that is estimated to cost the industry $100 million to comply. I support this bill because it would provide crucial relief to America’s brick, clay, and tile industries, the majority of which are small businesses. We should always remember that small businesses create about 7 out of every 10 new jobs in America. The last time a regulation like this was finalized, a federal court vacated the rule, but by then most brick makers had already undertaken expensive compliance measures that could not be reversed. The BRICK Act ensures that small business owners do not have to worry about spending millions of dollars to comply with a regulation that may well be thrown out of court again.”
WASHINGTON – This week, Chairman Chabot released the following statement after the U.S. Small Business Administration (SBA) Office of Inspector General (OIG) published a report evaluating SBA’s 7(a) loans made to poultry farmers:
“Unfortunately, the report confirms what the Committee already suspected: that there is misuse within the program regarding 7(a) loans made to poultry farmers that began in previous Administrations. OIG found loans made to farmers did not meet the SBA’s regulatory requirements for eligibility. The House Committee on Small Business plans to call the SBA Acting IG, along with SBA officials, to testify before the Committee about OIG’s findings and its recommendations. This report is further justification that more oversight at the SBA is needed to ensure the integrity of the 7(a) Loan Program as well as the necessity of passing H.R. 4743, the Small Business 7(a) Lending Oversight Reform Act.”
To read the SBA’s OIG report click here.
The Committee on Small Business will meet for a hearing titled, “Regulatory Reform and Rollback: The Effects on Small Businesses.” The hearing will take place at 11:00 A.M. on Wednesday, March 7, 2018 in Room 2360 of the Rayburn House Office Building.
Complying with federal regulations continues to be one of the biggest challenges for America’s small businesses. In an effort to reduce the continuing burden, both Congress and President Trump have taken steps to reduce the regulatory burden on small businesses by rolling back and revising existing regulations. The President has also taken steps to reform the regulatory process and require federal agencies to review their existing regulations and identify candidates for removal or revision. This hearing will examine the effects of Congress and the President’s regulatory reform and rollback efforts on small businesses and explore ways to continue to provide regulatory relief.Attachments
1. Hearing Notice
2. Witness List
Ms. Karen R. Harned
NFIB Small Business Legal Center
Mr. Patrick Hedren
Vice President, Labor, Legal & Regulatory Policy
National Association of Manufacturers
Mr. Randy Noel
National Association of Home Builders
Ms. Lisa Heinzerling
Justice William J. Brennan, Jr., Professor of Law
WASHINGTON—Today, Members of the House Committee on Small Business heard from a panel of stakeholders on the effects of Congress and the President’s regulatory reform and rollback efforts for small businesses and how to improve and lighten the regulatory burden.
“Small business owners must navigate what is often a tangled web of complex, confusing, and costly regulations. A start-up company will spend on average over $83,000 in regulatory costs alone in the first year. Small business owners also spend a substantial about of time with regulations, with nearly half of them spending over 40 hours every year to handle new and existing regulations,” said Chairman Steve Chabot (R-OH). “The evidence is clear: federal regulations continue to be a problem for America’s small business owners and needs to be addressed.”
Cutting Red Tape
Across every industry, small business owners continue to say that federal regulations are one of the top burdens they face as they spend a substantial amount of time trying not only to understand them, but adhere to them. The complexity of rules and difficulty understanding them are just the tip of the iceberg for many of America’s 29 million small businesses. In an effort to reduce the continuing burden, both Congress and President Trump have taken steps to reduce the regulatory burden on small businesses by rolling back and revising existing regulations.
“When it comes to regulations, small businesses bear a disproportionate amount of the regulatory burden. This is not surprising since it’s the small business owner, not one of a team of “compliance officers” who is charged with understanding new regulations, filling out required paperwork, and ensuring the business complies with new federal mandates,” stated Karen Harned, Executive Director of the Small Business Legal Center at the National Federation of Independent Business (NFIB) in Washington, DC. “In a Small Business Poll on regulations, NFIB found that almost half of small businesses surveyed viewed regulation as a ‘very serious’ (25 percent) or ‘somewhat serious’ (24 percent) problem.”
“Through the end of fiscal year 2017, the administration completed 67 actions classified as deregulatory, including rules without estimated annualized cost savings,” said Patrick Hedren, Vice President for Labor, Legal, and Regulatory Policy at the National Association of Manufacturers (NAM) in Washington DC. “While these numbers are dramatic, they do not indicate a slash-and-burn approach to deregulation. Instead, they indicate a more methodical approach taking place through the rulemaking process.”
“On the positive side, the successful efforts of this administration and Congress to reduce the regulatory burdens on small businesses in the home building industry are remarkable both in their number and scope,” implored Randy Noel, Chairman at the National Association of Home Builders (NAHB) in Washington DC. “To date, we have seen more than 20 significant regulatory changes that will benefit home owners, home buyers, and home builders.”
While it is clear that some regulation is necessary and can provide clear direction to small businesses when done responsibly, regulations can pile up and cost so much that it puts them out of business. Easing the regulatory burden on small businesses continues to be one of the top priorities of the Committee.
Words into Action
Earlier this Congress, Chairman Chabot introduced H.R. 33, the Small Business Regulatory Flexibility Improvements Act to force federal regulators to craft smarter, less burdensome regulations that take into consideration their direct and indirect economic effects on small businesses.
WASHINGTON – This week, House Committee on Small Business Chairman Steve Chabot (R-OH) spoke on the House floor in support of H.R. 4607, the Comprehensive Regulatory Review Act. This follows a hearing the Committee held last week to examine a Government Accountability Office (GAO) report that identified a number of financial regulations that burden community banks and credit unions.
On the floor, Chairman Chabot said:
“I want to thank Chairman Hensarling, and the entire Financial Services Committee, for their continued important work on financial regulations.
As Chairman of the Committee on Small Business, I constantly hear from Main Street businesses that regulations are preventing business expansion and job growth.
Just last week, I chaired a hearing on a recent report by the non-partisan Government Accountability Office that explored whether financial regulations were impacting community banks and credit unions.
One of the major takeaways from that report was that we need to improve the tools available to financial regulators to reduce burdens.
Because small businesses most often rely on conventional bank borrowing to finance their development, any additional red tape that reduces access to capital can be a monumental problem for the nation’s smallest firms.
The bill that we have before us today, which would reform the Economic Growth and Regulatory Paperwork Reduction Act of 1996, is a move in the right direction.
Making sure all financial regulators have a comprehensive process in place to review regulations will only strengthen our financial sector, which plays an outsized role for the millions of small businesses that line the streets of our communities and neighborhoods.
I urge my colleagues to support the common sense reforms in H.R. 4607, and I yield back.”
Click here to watch the full speech.
The Committee on Small Business Subcommittees on Health and Technology and Agriculture, Energy, and Trade will meet for a joint hearing titled, “Disconnected: Rural Broadband and the Business Case for Small Carriers.” The hearing is scheduled to begin at 10:00 A.M. on Tuesday, March 6, 2018 in Room 2360 of the Rayburn House Office Building.
This hearing will examine the disparities between large, nationwide carriers and small, rural carriers that contribute to the urban and rural digital divide. Rural communities depend on small carriers to provide internet and telecommunications service where nationwide providers may choose not to deploy broadband, or provide minimal service. Deploying broadband in these high-cost areas requires significant investment in capital, time, and resources. The cost of investment, coupled with challenges unique to small, rural carriers in offsetting costs creates barriers to competition and sustainability for small and rural carriers in the mobile wireless marketplace. This hearing will focus on challenges inherent in the current regulatory and operational schemes that limit the ability of small carriers to deploy broadband in rural America.Documents
1. Hearing Notice
2. Witness List
Ms. Erin Fitzgerald
Womble Bond Dickinson, LLP
*Testifying on behalf of the Rural Wireless Association, Inc.
Mr. Tim Donovan
Senior Vice President, Legislative Affairs
Competitive Carriers Association
Mr. Paul Carlisle
Carliner Strategies LLC
*Testifying on behalf of the Blooston Rural Carriers
Mr. Derrick Owens
Vice President of Government Affairs
Western Telecommunications Alliance (WTA)
WASHINGTON – This week, House Committee on Small Business Chairman Steve Chabot (R-OH) sent a letter to Marvin Kaplan, Chairman of the National Labor Relations Board (NLRB), expressing his disappointment in the NLRB’s recent vote to reinstate the harmful joint employer rule by vacating the Hy-Brand Industrial Contractors, Ltd. and Brandt Construction Co. decision from December 2017.
In the letter, Chairman Chabot said:
“For over 30 years, the NLRB used one standard to determine whether two separate businesses were joint employers. By vacating the December decision, the Board has once again put small business employers in limbo by not knowing if they will be unfairly held responsible for actions by employees they do not employ.”
Chabot continued, “I am extremely disappointed in the Board’s decision and will continue working to advance the legislation that is necessary to restore certainty to America’s small business owners and their employees.”
To read the full letter click HERE.
Chairman Chabot is an original cosponsor of H.R. 3441, the Save Local Business Act, to reverse the NLRB’s decision expanding the definition of the joint employer standard. H.R. 3441 passed the House on November 8, 2017.
The Committee first held a roundtable in April 2015 on the issue. NLRB then expanded its definition of the joint employer standard in August 2015. In March 2016, the Committee held a hearing titled, “Risky Business: Effects of New Joint Employer Standards for Small Firms” to examine the negative impact of the rule on small businesses.
WASHINGTON—Today, Members of the Subcommittees on Health and Technology and Agriculture, Energy, and Trade held a joint hearing on the challenges in the current regulatory and operational environment that limit the ability of small carriers to bridge the rural digital divide.
“As our world becomes increasingly dependent on a robust telecommunications service and wireless internet, the lack of it in places like American Samoa and rural America becomes even more glaring,” said Subcommittee Chairwoman Amata Radewagen (R-AS). “As we begin to examine the current state of America’s infrastructure and take steps to improve our nation’s highways and buildings, we need to ensure that broadband is at the front and center of all infrastructure discussions.”
“Small, rural internet service providers shoulder a heavy burden deploying broadband across hundreds of miles of diverse and sparse terrain,” stated Subcommittee Chairman Rod Blum (R-IA). “The significant investment required to deploy, maintain, update, and continually service these high-cost, rural areas should not be taken lightly.”
Bridging the Digital Divide
In an ever-changing technological era, the ability to provide high-quality and potentially life-saving broadband to rural Americans is key to putting America first. Earlier this year, President Trump created the Interagency Task Force on Agriculture and Rural Prosperity that presented a report focused on e-connectivity in rural America. The report cites that access to broadband, “is not simply an amenity—it has become essential.”
“With respect to many parts of rural America, the four nationwide providers tend to focus coverage only on towns and major highways, and place sparsely populated areas at the very bottom of their network upgrade list,” said Erin Fitzgerald, Regulatory Counsel at the Rural Wireless Association, Inc. in Washington, DC. “In contrast, rural-based providers tend to prioritize and value customer experience when it comes to network coverage by making every effort to provide robust coverage throughout all parts of their service area`, even outside of towns and miles from public roads.
“Currently, however, providers must navigate a regulatory maze to gain approval to serve their communities, facing significant application review delays and burdensome, unforeseen fees while working through the federal, state, and local siting processes,” implored Tim Donovan, Senior Vice President for Legislative Affairs at the Competitive Carriers Institute in Washington, DC. “Just last week twenty-four non-nationwide CEOs and senior executives from CCA member companies joined together to urge the FCC to streamline infrastructure policies by providing regulatory certainty around siting processes, timelines, and fees to deploy and upgrade mobile broadband services.”
“Small rural internet service providers are key to building the rural broadband infrastructure,” stated Paul Carliner, Co-Founder of Bloosurf, LLC., in Salisbury, MD. “When it comes to providing high speed internet service in rural communities, we know from experience that one size does not fit all. Every rural community is different.
“These small businesses are hard at work, under tough circumstances, bringing advanced communications services to areas where there are few people and little financial reward. They do this so their communities don’t fall on the wrong side of the digital divide; they want them to be active participants in this digital era and global economy,” said Derrick Owns, Senior Vice President of Government and Industry Affairs at WTA-Advocates for Rural Broadband in Washington, DC. “It is encouraging to see policymakers devote an increased level of attention to rural broadband over the past several years.”
Access to rural broadband spurs job growth and job creation. Improving access to education, health services, and innovation in the agritech sector are all dependent on the ability to transmit data and communicate information quickly, efficiently, and at a low cost.
The Committee on Small Business will meet for a hearing titled, “How Red Tape Affects Community Banks and Credit Unions: A GAO Report.” The hearing will take place at 11:00 A.M. on Wednesday, February 28, 2018 in Room 2360 of the Rayburn House Office Building.
The hearing will examine a report by the United States Government Accountability Office (GAO) that assessed how regulations impact community banks and credit unions. The GAO report identifies a number of financial regulations that are burdensome for small financial institutions. Additionally, the report outlines the tools and methods that financial regulators have at their disposal to reduce burdens on small financial institutions. The hearing will provide Members of the Committee with the opportunity to explore the regulations that are impacting the institutions that are instrumental in delivering capital to the nation’s small businesses.Attachments
1. Hearing Notice
2. Witness List
Mr. Michael Clements
Financial Markets and Community Investment
United States Government Accountability Office
The Committee on Small Business Subcommittee on Economic Growth, Tax, and Capital Access will meet for a hearing titled, “Occupational Hazards: How Excessive Licensing Hurts Small Business.” The hearing is scheduled to begin at 10:00 A.M. on Tuesday, February 27, 2018 in Room 2360 of the Rayburn House Office Building.
This hearing will examine how easing occupational licensing barriers could reduce workforce gaps and regulatory costs for small businesses.Attachments
1. Hearing Notice
2. Witness List
Mr. C. Jarrett Dieterle
R Street Institute
Mr. Keith Hall
President and Chief Executive Officer
National Association for the Self-Employed
Annapolis Junction, MD
Mr. Frank Zona
*Testifying on behalf of the Professional Beauty Association
WASHINGTON – Today, Chairman Steve Chabot (R-OH) and the Committee on Small Business held a hearing to examine how red tape and bureaucracy affect community banks and credit unions. Specifically, Committee Members examined a Government Accountability Office (GAO) report that identified a number of financial regulations that hurt smaller financial institutions.
“The local community bank and the neighborhood credit union play an outsized role in lending to small businesses. This relationship between the entrepreneur and the small financial institution is instrumental,” said Chairman Chabot.
Chabot continued, “When the mortgage meltdown in the mid-to-late 2000s triggered a financial crisis, these small financial institutions did not play a significant role in the crash. However, as a result of the crisis, Congress enacted the Dodd-Frank law, which was intended to improve oversight of the nation’s largest banks. Unfortunately, many of these requirements and regulations have trickled down to the nation’s smallest financial institutions. A one-size-fits-all regulatory framework is not sustainable for America’s smallest businesses.”
GAO Report Confirms Regulations Are Impacting Small Financial Institutions
“Institution representatives told us they found these regulations were time-consuming and costly to comply with because the requirements were complex, required individual reports that had to be reviewed for accuracy, or mandated actions within specific time frames. For example, among the 28 community banks and credit unions whose representatives commented on HMDA (Home Mortgage Disclosure Act)-required reporting in our focus groups, 61 percent noted having to conduct additional HMDA-related training,” said Michael Clements, Director of Financial Markets and Community Investment of GAO in Washington, D.C.
Clements continued, “Representatives in all of our focus groups and many of our interviews said that the TRID (the Truth in Lending Act and the Real Estate Settlement Procedures Act) have increased the time their staff spends on compliance, increased the cost of providing mortgage lending services, and delayed the completion of mortgages for customers.”
The Committee on Small Business will continue to study the impact of regulations on small businesses and our economy, and problems outlined in the GAO report.
WASHINGTON – Today, Subcommittee Chairman Dave Brat (R-VA) and the Subcommittee on Economic Growth, Tax, and Capital Access held a hearing on occupational licensing and its excessive impact on American small businesses.
“The percentage of the workforce that requires an occupational license has increased from less than 5 percent in the 1950s to almost 33 percent today,” said Subcommittee Chairman Dave Brat. “But one of the most telling statistics about licensing is that while there are 1,100 occupations in the United States that are licensed in at least one state, only 60 require a license in all 50 states. This inconsistency hurts worker mobility and most importantly, small businesses.”
Licensing as a Barrier to Entry
Despite small business confidence reaching an all-time high, many see burdensome licensing regulations as another barrier small business owners must overcome.
“I’m not prepared to say that licensing should go away. I need the foundation and the commitment. Let’s create reform where appropriate to better fit the current realities of trades and professions,” said Frank Zona, Owner of Zona Salons in Norwell, MA, testifying on behalf of the Professional Beauty Association.
“Some licensing requirements are necessary, but what has become evident in our own research is that for many of our members, nearly 68% in our snapshot poll, said that they find that the licensing requirements hinder their ability to operate their small business,” stated Keith Hall, President and Chief Executive Officer of the National Association for the Self-Employed in Annapolis Junction, MD.
“Occupational licensure acts as a formidable barrier to entry for low- and middle-income Americans seeking to enter new professions,” said C. Jarrett Dieterle, Senior Fellow at the R Street Institute in Washington, DC. “The result is a government-imposed barrier that arbitrarily limits Americans’ ability to work and climb the income ladder to more prosperity.”
“Evidence indicates that occupational licensing can hamper mobility, making it harder for workers to take advantage of job opportunities in other regions,” said Dr. Morris Kleiner, Professor at the University of Minnesota in Minneapolis, MN. “Overall, occupational licensing and the lack of consistency across state borders with respect to the education and training of licensed practitioners can carry broad implications for the economic well-being of individuals.”Click here to watch full hearing video, and here to read full witness testimony.
The Committee on Small Business will meet for a hearing titled, “Workforce Development: Closing the Skills Gap.” The hearing is scheduled to begin at 11:30 A.M. on Monday, February 26, 2018 in Boilermakers Local Lodge No. 13 at 2300 New Falls Road, Newportville, PA.
The Committee will examine ways in which federal programs help or hinder workforce development initiatives aimed at supporting small businesses. The hearing will explore methods in which programs can close the skills gap while also connecting a new generation of workers with rewarding jobs in industries that lack qualified applicants.Attachments
1. Hearing Notice
2. Witness List
Mr. Patrick Eiding
Philadelphia Council AFL-CIO
Ms. Susan Herring
Interim Executive Director
Center for Workforce Development
Bucks County Community College
Mr. Alex Halper
Director of Government Affairs
Pennsylvania Chamber of Business and Industry