WASHINGTON—New data from the CFPB has found that small business lending has increased following the Great Recession, but lenders in the median county made half the number of loans per business in 2017 as they had in 2004.
The report details the evolution of small business lending before, during, and after the Great Recession, NAFCU reported.
According to the Bureau, the report is comprised of data from the Community Reinvestment Act (CRA) on small business lending at the county level from 2004-2017 and Census data on the number of employer and non-employer firms.
Report Findings
Other findings from the report include:
- There was an increase in small business lending following the Great Recession but there has been substantial variation by county and state
- Post-Great Recession there were regional differences in increases in small business lending, with states on the East Coast and in the South recovering at a faster rate
- From before the Great Recession through 2017, the total number of thrifts, community banks, and large banks engaged in small business lending have declined. However, the number of credit unions offering small business lending products has increased since the beginning of the Great Recession
The CFPB is required to collect data related to small business lending under Section 1071 of the Dodd-Frank Act. NAFCU noted has previously urged the CFPB to exempt credit unions from rulemakings related to data collection and reporting on small business lending, as the industry is subject to strict limits on member business lending and field of membership rules.
CU Limits Acknowledged
In the report, the Bureau acknowledges that credit unions are limited by the lending cap for member business loans, currently set at 12.25% of total assets.
A previous edition of NAFCU's Economic & CU Monitor revealed that credit unions continue to invest in their communities and are an important source of credit for small businesses, particularly during times of economic stress.