The U.S. Chamber of Commerce and its GOP allies have been busy warning that an independent Consumer Financial Protection Agency will hurt small business -- but a growing number of small business owners are saying just the opposite.
When asked to speak for themselves, they say a strong CFPA is the only thing that can protect them from the predatory practices of the corporate titans represented by the Chamber.
Small business owners, after all, frequently wind up using personal credit cards to cover their expenses. Consequently, they're often victimized by the kinds of deceptive interest rates and fee structures that the CFPA could do away with or otherwise regulate. Small business owners may have created two out of three net new jobs in the past decade and a half, but they say that big businesses are strangling their finances and killing those jobs.
"The financial crisis has demonstrated the need for a new independent federal agency to promote financial product safety and establish clear, enforceable rules of the road. Business owners and consumers need full and fair disclosure of the costs and risks of financial products and services," reads part of the petition circulated by Business for Shared Prosperity, a progressive business group. "A Consumer Financial Protection Agency will expose unsafe products and services and encourage accountability and fair competition. It will help ensure we do not repeat the reckless practices we are paying dearly for today."
Some 200 small business owners and leaders of small-business advocacy organizations throughout the United States have signed the petition, which urges the Senate to include an independent consumer protection agency in its financial regulatory reform legislation. Additionally, two-thirds of the 1,200-plus business owners polled by the progressive small-business group Main Street Alliance favor the creation of the proposed CFPA. The consumer agency made it into the House regulatory reform bill that passed in November, albeit with numerous exemptions for favored industries.
Among the petition's signatories is Margot Dorfman, the CEO of the U.S. Women's Chamber of Commerce, who charged the financial sector with "extraordinary abuse of small businesses and everyday Americans" by means of toxic products and willfully misleading business practices. "It is time for our political leaders to act to support the financial protection and well-being of all Americans," Dorfman said in a statement.
The megabanks and their allies in the U.S. Chamber proper are the last people who should be speaking on behalf of small business, said Lew Prince, another petition signatory. "Politicians love to point out that most new jobs are created by small business," said Prince, who runs Vintage Vinyl in St. Louis, Mo. "They should listen to the business owners who didn't wreck the economy and want real reform to prevent a repeat."
A new level of transparency in small-business loans and other financial products might even help the big banks in the long term, said Tim Duncan, Chairman of American Business Leaders for Financial Reform, if they can "avoid the mindset that can't see beyond the next quarter's results." But whatever happens to Wall Street's bonuses, "honest and affordable credit is fundamental to business success and nurturing the innovation needed to keep the U.S. competitive in the world economy," said fellow petition signatory Alan Gregerman, the president of the Silver Spring, Md.-based business consulting firm Venture Works. "A lack of appropriate regulation has hurt America and American businesses. We can and must do better."
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