PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

SBE Council’s Kerrigan on Passage of Financial CHOICE Act: Key to More Capital, Small Business Growth & Entrepreneurship for America

By at 8 June, 2017, 4:48 pm

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FOR IMMEDIATE RELEASE

Small Business Group Praises House Passage of H.R. 10: Critical Legislation to Foster Capital Formation, Investment and New Business Creation

Washington, D.C. – Today, the U.S. House of Representatives passed the Financial CHOICE Act, H.R. 10, legislation that will reduce excessive red tape on community banks as well as other provisions to streamline regulations that have harmed capital access for small businesses. The Small Business & Entrepreneurship Council (SBE Council) praised passage of this important reform legislation, as the current regulatory framework under Dodd-Frank is restricting the flow of capital to entrepreneurs and small businesses.

“Entrepreneurship and small business growth continue to struggle. Without capital, many potential entrepreneurs will continue to sit on the sidelines putting their dream of starting a business on hold. Existing small businesses cannot seize growth opportunities because accessing capital is difficult and economic conditions remain unclear. The Financial CHOICE Act is a significant and positive reform for small businesses, entrepreneurs and their workforce. It will institute needed changes to help spark robust capital formation and growth for the U.S. economy,” said SBE Council president & CEO Karen Kerrigan.

Weak economic conditions and the lack of capital have played a role in the dearth of entrepreneurship. According to SBE Council research, the cumulative loss of new businesses and startups over the last decade totals 3.42 million – these are “missing” businesses that were never started. Unfortunately, our nation’s small businesses are being cut off from capital, which has hurt their competitiveness, growth and hiring. The dwindling number of community banks in the aftermath of Dodd-Frank’s passage, on top of red tape that is smothering other parts of our financial system are having a disproportionate impact on small businesses.

“Capital is the lifeblood of our economy. Access to capital is critical to the growth of small businesses, and for entrepreneurs who want to startup or scale a business. If we want to strengthen small businesses, entrepreneurship and quality job creation in America, we need an environment where capital is abundant and investment is encouraged. The Financial CHOICE Act is critical to creating a better climate for both. Our small business members are grateful for Chairman Jeb Hensarling’s leadership, and for all House members who played a role in crafting and passing this important bill,” added Kerrigan.

The Financial CHOICE Act:

• Makes key revisions that will allow community banks to get back to business, which means financing the startups and local small businesses that are critical to the economic growth of local communities.

• Incorporates needed Securities and Exchange Commission (SEC) reforms that will make rules and compliance more rational, streamlined, and fair. In the end, these changes will improve capital formation by modernizing rules and processes that have created barriers for raising capital.

• Includes almost two dozen capital formation bills, many of which have passed the House with large bipartisan votes or by voice vote. These bills zero in on sound reforms that specifically help startups and small businesses access the capital they need to launch, scale, and compete.

• Addresses improvements to the JOBS Act, and the rules governing its provisions, which will open crowdfunding more widely and leverage its early success by lowering costs and fixing regulations that have caused uncertainty and limited its potential. 

• Makes needed changes to the Consumer Financial Protection Bureau (CFPB) – an entity created by Dodd-Frank, and embedded within the Federal Reserve, that has become increasingly unaccountable and whose rogue actions are harming capital access as well as innovation and competition in the financial industry.

Read SBE Council’s support letter to all U.S. House Members in support of the Financial CHOICE Act, H.R. 10.

Contact: Karen Kerrigan, 703-242-5840 or kkerrigan@sbecouncil.org

Raymond J. Keating, Chief Economist 631-909-1122 or rkeating@sbecouncil.org 

SBE Council is a nonpartisan, nonprofit advocacy, research and education organization that works to protect small business and promote entrepreneurship. For nearly 25 years SBE Council has worked to successfully implement a range of policy and private sector initiatives to strengthen the ecosystem for startups and small business growth. To learn more, visit SBE Council’s website: www.sbecouncil.org. Follow on Twitter: @SBECouncil

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