[Congressional Record Volume 147, Number 163 (Thursday, November 29, 2001)]
[House]
[Pages H8630-H8631]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       ACCESS AND OPENNESS IN SMALL BUSINESS LENDING ACT OF 2001

  (Mr. McGOVERN asked and was given permission to address the House for 
1 minute and to revise and extend his remarks, and include therein 
extraneous material.)
  Mr. McGOVERN. Mr. Speaker, I join my colleagues today to introduce 
the Access and Openness in Small Business Lending Act of 2001, a bill 
that I hope will dramatically improve lending practices that benefit 
women and minority-owned small businesses.
  This legislation will amend the Equal Credit Opportunity Act and 
require depository lenders such as banks, credit

[[Page H8631]]

unions, and thrifts to collect race and gender information for small 
business borrowers. But while the Access and Openness Act requires 
depository institutions to keep such records, it does not require 
borrowers to disclose race and gender information if they do not want 
to.
  The Access and Openness Act will effectively eliminate the Federal 
Reserve's regulation B, which prohibits lenders from collecting data 
regarding an applicant's gender and race.
  The guiding principle behind this bill is time-tested and simple: 
sunshine is the best disinfectant. Without the specific knowledge of 
the demographic composition of small business borrowers, including 
those that apply but do not get approval, we will never be able to 
unmask discriminatory lending practices or systematically monitor 
programs that advance women and minority business ownership.
  The Access and Openness Act is modeled after the Home Mortgage 
Disclosure Act, which requires banks to report demographic data on home 
mortgage lending. It is my hope that this bill will move banks to 
operate as effectively in the women and minority small business lending 
market as they have in the home mortgage market where the collection of 
demographic data has opened lending to underserved communities.
  Mr. Speaker, I will include at this point in the Record the following 
supporting material:

       Access and Openness in Small Business Lending Act of 2001


                        supporting organizations

       National Women's Business Council, a federal commission, 
     Association for Women's Business Centers, Women's Business 
     Development Center, Milken Institute, National Community 
     Reinvestment Coalition, Hispanic Economic Development 
     Corporation, and Alternatives Federal Credit Union.
       Southern Rural Development Initiative, National Congress 
     for Community Economic Development, Cabrillo Economic 
     Development Corporation, Pittsburgh Community Reinvestment 
     Group, Chelsea Neighborhood Housing Services, Rural 
     Opportunities, and Greater Holyoke Community Development 
     Corporation.
       Community Action Committee of the Lehigh Valley, Texas 
     Community Reinvestment Coalition, Charlotte Organizing 
     Project, Common Wealth Development, Wisconsin, Western New 
     York Law Center, and California Reinvestment Committee.
       Rural Housing Institute, National Neighborhood Housing 
     Network, Vermont Slauson Economic Development Corporation, 
     Los Angeles, Lawyers' Committee for Civil Rights Under Law, 
     Coastal Enterprises, Inc., and Mon Valley Initiative.
                                  ____

                                                National Community


                                       Reinvestment Coalition,

                                    Washington, DC, June 21, 2001.
     Hon. James P. McGovern,
     House of Representatives, Cannon House Office Building, 
         Washington, DC.
       Dear Congressman McGovern: The National Community 
     Reinvestment Coalition (NCRC) strongly supports ``the Access 
     and Openness in Small Businesses Lending Act of 2001'' as 
     essential to the efforts of lending institutions, community 
     organizations, and local public agencies to increase access 
     to capital and credit for women- and minority-owned 
     businesses. NCRC's 800 member organizations--community groups 
     and local public agencies--around the country also commend 
     the leadership of Representatives McGovern and Morella in 
     sponsoring this bill.
       The Access in Small Business Lending Act of 2001 would 
     amend the Equal Credit Opportunity Act (ECOA) to require 
     banks, thrifts, and credit unions to report the race and 
     gender of the small businesses from which they receive 
     applications and to which they make loans. This data is to be 
     disclosed regardless of whether the application is made in 
     person, over the phone, or received via mail or the Internet.
       This data disclosure requirement promises to greatly 
     increase access to credit for minority and women-owned 
     businesses. Working together, community groups, lending 
     institutions and local public agencies would analyze publicly 
     available small business data and identify the small business 
     owners and neighborhoods that remain underserved. Stimulated 
     by data disclosure, these types of community-lenders 
     partnerships are a win-win: bankers seize upon untapped 
     markets and find additional profitable lending opportunities; 
     community organizations and small businesses receive more 
     access to private sector credit with which to revitalize 
     their neighborhoods and expand their commercial base.
       An amendment to HMDA (Home Mortgage Disclosure Act) data in 
     1990 to require the reporting of race and gender of 
     applicants unleashed a tremendous increase in lending to 
     traditionally underserved populations. From 1993 to 1999, for 
     example, the number of conventional home purchase loans 
     increased 119 percent for African-Americans, 116 percent for 
     Latinos, and only 42 percent for whites.
       Unfortunately, the state of affairs is not as sanguine in 
     the small business area. The truncated CRA small business 
     data (which only reveals the census tract in which a loan is 
     made) suggests that much progress needs to be made. From 1996 
     to 1999, the number of small business loans increased 39 
     percent overall but only 8 percent in low-income census 
     tracts. As a result, the percent of small business loans made 
     in low- and moderate-income tracts declined from 21 percent 
     to 18 percent, despite * * *

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