ICBA study: Small-business owners satisfied with community banks, but regulations threaten lending

ICBA released findings from a study showing that while small-business owners prefer community banks, increasingly burdensome and complex regulations threaten to restrict small-business lending.

Highlights: According to “Finding Balance: How Well-Intended Policies Hamper Small Business Lending and Undermine Relationship Banking:”

• 95% of surveyed small-business owners were satisfied with their overall experience partnering with community banks, with nearly 9 in 10 citing products and services unique to small-business needs.

• Community bank regulatory burdens continue piling up, with more than 9 in 10 ICBA-member community bankers saying the current regulatory environment is more challenging than it was five years ago.

• New rules are expanding regulatory mandates, with more than 80% of community bank respondents saying new 1071 data collection and reporting rules would inhibit their small-business lending.

• Policymakers can alleviate the burden, such as by nullifying and rewriting the 1071 rule, exempting community banks from new rules targeting larger institutions, and rigorously evaluating regulatory burdens.

Advocacy: ICBA shared the findings in a national news release and in a letter to the federal banking agencies and Consumer Financial Protection Bureau. In its letter, ICBA urged the agencies to exempt community banks from new rules, right-size data collection requirements, and enhance regulatory flexibility.

READ THE REPORT