Obama Puts Small-Business Lenders Under Racial Microscope

[Geee]

Investors Business Daily:

Regulation: In its phony war on bank bias, the Obama regime has opened a new front: small-business lending. Examiners will start looking at the racial impact of "underwriting criteria" for business loans, along with mortgages.

 

The White House complains minority-owned firms don't have the same access to credit as others. But the result of this new political scrutiny is easy to see: Commercial lenders will be pressured to lower standards, leading to riskier lending and higher defaults (see: mortgage bust, '08).

 

The Consumer Financial Protection Bureau has carved out a new executive-level position: "assistant director of small-business lending markets," which will lead an unprecedented collection of race-based data about loans to "minority-owned businesses."

 

Meanwhile, CFPB Director of Fair Lending Patrice Ficklin said the bureau is starting its first fair-lending-focused exams of business lenders. Specifically, regulators will look at "small-business loan underwriting criteria" to see if it has a discriminatory "disparate impact" on minority business owners applying for credit. Marketplace lending will also be under the microscope.