Scientific Opinion Poll Shows Small Businesses Want Tougher Rules on Wall Street and Financial Companies
Entrepreneurs overwhelmingly support Consumer Financial Protection Bureau, organization created by Dodd Frank Act to protect people from abusive lending practices
Washington, DC—A scientific opinion poll released today found 80 percent of small business owners believe Wall Street and financial companies should be held accountable for the practices that caused the financial crisis through tougher rules and enforcement, and two-thirds believe the level of government oversight of financial companies should increase or is about right the way it is. Additionally, 84 percent of entrepreneurs support the Consumer Financial Protection Bureau (CFPB)—the organization created by the 2010 Dodd Frank Act to protect people from abusive lending practices—and believe it's needed to prevent predatory financial practices and ensure all financial institutions treat small businesses and consumers fairly.
The national Internet poll of 500 small business owners, conducted by Lake Research Partners for Small Business Majority, revealed nearly six in 10 entrepreneurs agree that for far too long, Wall Street banks and financial companies wrote their own rules, leaving small businesses and consumers vulnerable and without protection. They believe the CFPB is needed because its mission is to change that.
While this issue is often times politicized, it is not a partisan one for small businesses. Republican poll respondents outnumbered those who identified as Democrats by 52-34 percent. Those identifying as independent made up 11 percent of respondents.
"Small businesses, along with our economy, are getting stronger, but they're certainly not immune to the lingering effects of our financial meltdown," said John Arensmeyer, founder & CEO of Small Business Majority. "That's why they feel strongly that Wall Street banks and other financial institutions need to be held accountable with tougher regulations. Predatory lending practices are still a problem and small businesses support the government's and the Consumer Financial Protection Bureau's role in fixing that."
The poll also found a strong link between small business finance and personal credit: 58 percent of small business owners said they've used a personal credit card to finance their business and 53 percent have personally guaranteed a loan for their business. That makes it clear why small businesses strongly support provisions of the 2009 Credit CARD Act, which established a series of laws to help protect consumers from banks and other financial institutions.
Small businesses nearly unanimously supported every aspect of the Credit CARD Act they were asked about: 96 percent support requiring financial companies to give at least 45 days notice of substantial change in terms, 98 percent support requiring that monthly statements include clear due dates, and 19 in 20 owners would like to see the Credit CARD Act provisions extended to small business credit cards (they currently only apply to personal credit cards). Six in 10 strongly support this.
"More work needs to be done to give small businesses the ability to push back against these unfair practices. A lot of small businesses don't have the power or the resources to fight against the big banks and financial companies," said Shaundell Newsome, President & CEO of Sumnu Marketing in Las Vegas, Nev. "These companies' practices haven't really changed since the recession, which is why I think it's incredibly important the Consumer Financial Protection Bureau was created to keep these folks accountable. However, many of the protections that individuals are seeing should be afforded to small businesses, as well."
Additional findings include:
- By a 2:1 ratio, small business owners agree the Consumer Financial Protection Bureau (CFPB) should maintain independent funding so that financial industry lobbyists cannot block its work when it makes decisions they do not like. Six in 10 agree with this, while just 29 percent believe the CFPB's funding should go through the Congressional budget process.
- Nearly four in 10 entrepreneurs (37 percent) report a firsthand experience with a bank or other financial institution processing their bank transactions in a way that maximizes fees, such as by processing withdrawals faster than deposits, or changing the order of withdrawals to generate more overdraft fees.
- Nine in 10 support regulations to explicitly bar banks from doing this, and instead require them to process transactions neutrally.
- 24 percent have experienced a lack of transparency or unclear terms with prepaid cards, mobile banking and more.
- 94 percent of owners would support regulations requiring full disclosure of terms for these financial products up front.
For the full report visit: http://www.smallbusinessmajority.org/small-business-research/financial-reform.
To listen to a recording of the call, click here.
About Small Business Majority
Small Business Majority is a national small business advocacy organization, founded and run by small business owners to focus on solving the biggest problems facing America's 28 million small businesses today. Since 2005, we have actively engaged small business owners and policymakers in support of public policy solutions, and have delivered information and resources to entrepreneurs that promote small business growth and drive a strong, sustainable economy. We are a team of more than 30 working from our 11 offices in Washington, D.C. and 9 states, with a network of more than 45,000 small business owners and more than 2,000 business organizations, along with a formal strategic partnership program of more than 125 business organizations, enabling us to reach more than 500,000 entrepreneurs. Our extensive scientific polling, focus groups and economic research help us educate and inform policymakers, the media and other stakeholders about issues including taxes, healthcare, access to capital, entrepreneurship, workforce development, clean energy and immigration. Learn more about us on our website.