LETTER TO ALL U.S. HOUSE MEMBERS: The Financial CHOICE Act, H.R. 10 – A Vote for Entrepreneurs and Capital Access

By at 7 June, 2017, 11:17 am

H.R. 10 Reforms will Encourage Capital Formation and Access for Entrepreneurs and Small Businesses

Dear Member of the U.S. House of Representatives:

The Small Business & Entrepreneurship Council (SBE Council) strongly supports the Financial CHOICE Act of 2017 (H.R. 10). Access to capital remains a critical challenge for many entrepreneurs, and the Financial CHOICE Act includes common-sense reforms that fix harmful provisions of Dodd-Frank, while building upon the progress that has been made in some areas to improve capital access for small businesses.

Strengthens Capital Formation and Access. 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. Furthermore, the Financial CHOICE Act incorporates needed Securities and Exchange Commission (SEC) reforms that will make SEC 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.

The Financial CHOICE Act 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. The Financial CHOICE Act also 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. 

Excessive Red Tape Has Taken a Toll on Small Banks. Dodd-Frank added layers of unnecessary red tape and bureaucracy, including on small, community banks. Given the role that small banks traditionally have played in helping to finance small businesses, entrepreneurs have paid a heavy price. As noted by SBE Council’s regular analyses of bank lending and the banking sector, as well as reports by the Federal Reserve, the decline and value of small business loans, the loss of small banks, and the collapse in new bank entry disproportionately impact smaller firms and the communities where they operate. The Financial CHOICE Act provides needed relief and reforms for small banks. 

Needed CFPB Changes. Unfortunately, the Consumer Financial Protection Bureau (CFPB) has become a secretive and unaccountable entity that needs transparency and better governance. Under the Financial CHOICE Act, the agency would be given the dual mission of consumer protection and competitive markets; require that cost-benefit analyses of rules be performed by a newly-formed Office of Economic Analysis; restructured as an Executive Branch agency with a single director removable by the President at will; and subject to congressional oversight and the normal appropriations process. The new and improved entity would also have a Senate-confirmed Inspector General, and its market-monitoring function would be repealed. Small business owners were rightly concerned about the CFPB collecting personally identifiable information, and it would be required to gain permission to do so under the Financial CHOICE Act.

Financial CHOICE ACT Brings Modern, Common Sense Approach to Rulemaking. In contrast to the burdensome and restrictive rules created by Dodd-Frank, the Financial CHOICE Act will truly reform the rules governing the financial system, encourage innovation across the system, vastly improve access to capital for entrepreneurs and small businesses, and transform a regulatory structure that lacks accountability, is too secretive, and ignores its responsibilities concerning small businesses.

The CHOICE Act punishes actual financial fraud; mandates that regulations be subject to cost-benefit analysis; requires financial regulators, when imposing a rule with $100 million or more of impact, to select the least costly, least burdensome or most cost-effective alternative; and truly ends “too big to fail” by establishing a new chapter of the bankruptcy code to accommodate the failure of large, complex financial institutions.

Entrepreneurship and small business growth continue to struggle. Without capital and confidence in our economy, many potential entrepreneurs are sitting on the sidelines while existing small businesses cannot seize growth opportunities because capital is difficult to access. The Financial CHOICE Act is a significant and positive reform for small businesses, entrepreneurs and their workforce. It will institute positive and needed changes to help spark robust and sustainable growth for the U.S. economy.

SBE Council urges you to vote for H.R. 10, the Financial CHOICE Act.


Karen Kerrigan, President & CEO


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