Last week, in a heartening display of bipartisan cooperation, the U.S. Senate passed a badly needed fix to banking regulations—the first major legislation of its kind since the economic recovery began. If the bill becomes law, it will bring long-overdue relief to the local banks and Main Street lenders that power small business growth, entrepreneurship, and job creation. The U.S. House of Representatives should quickly take up and pass this legislation.
Throughout most of our country’s history, small businesses have relied on community and regional banks for the capital they need to grow and create jobs. But after the financial crisis in 2008, policymakers adopted a one-size-fits-all approach to bank regulation that severely limited the ability of community and regional banks to serve small businesses. The results of this move speak for themselves. Since 2008, the number of small business loans has declined by over 40%, even though the U.S. economy has grown almost 25% over the same period.
Fortunately, Congress may now be coming to the rescue with the Economic Growth, Regulatory Relief, and Consumer Protection Act passed by the Senate last week. This important measure would breathe new life into regional and local lenders and, by doing so, provide a major jolt to economic growth and business investment. Small business optimism has already soared over the past year owing in large part to the passage of tax reform. Congress and President Trump now have an opportunity to add even more momentum to the recovery.
In addition to being a positive economic development, the passage of this bill is a positive political and legislative development. The U.S. Chamber of Commerce congratulates the senators—Republican and Democrat alike—who recognized a need, got together, and hashed out their differences. This is a prime example of how government is supposed to work, and we hope legislators will build on this progress by passing additional commonsense reforms.
Many of the provisions of this bill were first considered in the House, which should help get this needed relief to the president’s desk. We’ll be urging U.S. representatives in both parties to recognize the enormous good this bill can do for their local communities. Our message is simple: Capital is the fuel that keeps our economic engine running. When we reduce access to that fuel, it makes it harder to turn ideas into reality. But when we increase access, it powers the business expansion, startup creation, and job growth that lead to widespread prosperity. So let’s step up and fuel the growth engine.