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Committee on Small Business Holds Hearing Examining the State of Small Business Amid Unprecedented Economic Challenges
WASHINGTON, D.C. – Today, Chairman Roger Williams (R-TX) led a full Committee on Small Business hearing titled “Main Street Realities: Examining the Current Economic Landscape in America.” Chairman Williams issued the following statement regarding today’s hearing.
“Today’s hearing confirmed what we have heard from so many small business owners: the Biden Administration’s agenda is only making life more difficult for them,” said Chairman Williams. “Amid unprecedented economic challenges, this Administration has piled on over $1.6 trillion of burdensome regulations onto the backs of America’s job creators. Fortunately, small businesses are resilient. Our Committee will continue to fight for the needs of America’s small businesses, slashing regulatory burdens and creating an environment where Main Street can thrive.”
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Watch the full hearing here.
Below are some key excerpts from today’s hearing:
Chairman Williams: “However, it is not just interest rates are increasing the cost of borrowing regulations add significant cost to financial institutions, which are ultimately passed along to their customers. Ms. Davis, first question. You previously served as compliance officer at your bank and are very aware of the impact that regulations have on the price of various financial products. So can you tell us how increased compliance burdens are negatively affecting the access to capital on your community and which customers are most impacted by this increased cost?” Ms. Davis: “Thank you. Chair. Yes. related to compliance costs, as I said in my statement, every dollar spent takes away from an investment in the community, either through a loan or through direct capital investments to improve those LMI individuals. Specifically related to the increase in costs, it costs the same amount to give a $5 or a $5,000 loan that it would $100,000 loan, but the cost ratio of what has had to be implemented is more proportional, to the smaller dollar loans. So, it tends to affect our low and moderate income borrowers, the most because they are those that are looking for the smaller dollar, business loans.”
Rep. Stauber: “How does the avalanche of regulations coming out of Washington make your job more difficult?” Mr. Martinez: “I can tell you that, because we're talking energy codes, because we're talking building codes, when we get a new wholesale set of codes, it's a 600-to-800-page document that we have to peruse through oftentimes in our truck as we're, you know, trying to figure out a code change. And that's just on that building code side of things. When you add OSHA, when you add EPA, when you add Army Corps of Engineers, I mean, the list goes on. Not to mention, that anti-growth sentiment that we're getting now because of the amount of growth. And so, we're fighting it on all fronts and unfortunately, it's just making the problem worse.”
Vice Chair Luetkemeyer: “Ms. Davis, quite frankly, as a former banker, you've got the toughest job in the bank as a compliance officer. I empathize with you, it's a tough job, especially with the rules and regulations pouring out of Washington and the cost of complying with those. My question today is with regards to the tax cuts, you see it every day with the businesses that you finance in the bank. Have you seen those businesses take those dollars and reinvest them, or do you see them stick in your pocket and, and running off and vacationing with those things?” Ms. Davis: “You know, I think most small businesses are members of their community. So, they're going to take those dollars that they've been able to accumulate and reinvest them, not only to grow their business, but also in their employees. You know, a lot of them provide additional services, volunteer hours. I mean, again, small businesses really are the lifeblood of all of our communities and so when they have dollars available, they can expand their businesses.”
“Today’s hearing confirmed what we have heard from so many small business owners: the Biden Administration’s agenda is only making life more difficult for them,” said Chairman Williams. “Amid unprecedented economic challenges, this Administration has piled on over $1.6 trillion of burdensome regulations onto the backs of America’s job creators. Fortunately, small businesses are resilient. Our Committee will continue to fight for the needs of America’s small businesses, slashing regulatory burdens and creating an environment where Main Street can thrive.”
---
Watch the full hearing here.
Below are some key excerpts from today’s hearing:
Chairman Williams: “However, it is not just interest rates are increasing the cost of borrowing regulations add significant cost to financial institutions, which are ultimately passed along to their customers. Ms. Davis, first question. You previously served as compliance officer at your bank and are very aware of the impact that regulations have on the price of various financial products. So can you tell us how increased compliance burdens are negatively affecting the access to capital on your community and which customers are most impacted by this increased cost?” Ms. Davis: “Thank you. Chair. Yes. related to compliance costs, as I said in my statement, every dollar spent takes away from an investment in the community, either through a loan or through direct capital investments to improve those LMI individuals. Specifically related to the increase in costs, it costs the same amount to give a $5 or a $5,000 loan that it would $100,000 loan, but the cost ratio of what has had to be implemented is more proportional, to the smaller dollar loans. So, it tends to affect our low and moderate income borrowers, the most because they are those that are looking for the smaller dollar, business loans.”
Rep. Stauber: “How does the avalanche of regulations coming out of Washington make your job more difficult?” Mr. Martinez: “I can tell you that, because we're talking energy codes, because we're talking building codes, when we get a new wholesale set of codes, it's a 600-to-800-page document that we have to peruse through oftentimes in our truck as we're, you know, trying to figure out a code change. And that's just on that building code side of things. When you add OSHA, when you add EPA, when you add Army Corps of Engineers, I mean, the list goes on. Not to mention, that anti-growth sentiment that we're getting now because of the amount of growth. And so, we're fighting it on all fronts and unfortunately, it's just making the problem worse.”
Vice Chair Luetkemeyer: “Ms. Davis, quite frankly, as a former banker, you've got the toughest job in the bank as a compliance officer. I empathize with you, it's a tough job, especially with the rules and regulations pouring out of Washington and the cost of complying with those. My question today is with regards to the tax cuts, you see it every day with the businesses that you finance in the bank. Have you seen those businesses take those dollars and reinvest them, or do you see them stick in your pocket and, and running off and vacationing with those things?” Ms. Davis: “You know, I think most small businesses are members of their community. So, they're going to take those dollars that they've been able to accumulate and reinvest them, not only to grow their business, but also in their employees. You know, a lot of them provide additional services, volunteer hours. I mean, again, small businesses really are the lifeblood of all of our communities and so when they have dollars available, they can expand their businesses.”
