Advancing transparent lending policies
Last week, Accion Opportunity Fund leadership testified before policymakers across the country to advocate on behalf of small business owners. We’re proud to lend our voice to the fight for a more inclusive financial system for overlooked and underfunded entrepreneurs.
Increasing visibility into lending data
On March 28th, 2023, AOF CEO Luz Urrutia testified before Congress on the impact of the Consumer Financial Protection Bureau’s Lending Data Collection Rule – Section 1071, which requires financial institutions to report lending data to businesses owned by women and people of color, as well as small businesses. Luz argued that increased transparency could provide better visibility into which lending models are successful in reaching under-invested entrepreneurs, which would, in turn, attract private sector investment into those markets. Ultimately, this will help entrepreneurs to be fully seen and better served by all lenders. But without this level of transparency, as Luz says, “We cannot manage what we do not measure.”
We’re thrilled that on March 30th, Section 1071 rule was officially finalized.
Providing transparent loan terms
Also on March 28th, Joshua Miller, AOF’s VP of Research and Policy, spoke in front of the Maryland General Assembly Senate Finance Committee in support of SB 496, which requires lenders to disclose the Annual Percentage Rate (APR) to those seeking funding. AOF has found that without these protections, small business owners, especially people of color, are unacceptably and unjustly targeted and misled by unscrupulous non-bank lenders.
Protecting small business borrowers’ rights
On March 29th, Michael Rapaport, AOF’s President and COO, addressed members of California’s Senate Banking and Financial Institutions Committee on SB 33, a similar proposal that encourages APR transparency and makes these critical protections permanent. These disclosures help business owners better understand and compare their financing options across different lenders, so that they can make the best choices for their businesses based on factual information.
Amplifying the voices of small business owners
These issues are critical to AOF’s mission, and we’re proud to amplify the voices of overlooked communities. Under-invested entrepreneurs rarely get the opportunity to speak out against unfair policies, or to advocate for their own advancement or protection. It’s a crucial part of our work to try to influence state and federal policies that will help them succeed and create a more inclusive financial system for all.