How to modify current data reporting requirements regarding loans to small businesses and small farms to give a better picture of such lending is the focus of a request for comments issued jointly by federal banking regulators and published in the Federal Register Thursday.
The Federal Deposit Insurance Corp. (FDIC), on behalf of the three agencies, issued a Financial Institution Letter Friday encouraging comments.
The FDIC, Federal Reserve Board, and Office of the Comptroller of the Currency (OCC) issued the request in response to an August 2018 Government Accountability Office (GAO) report. In that report, the GAO said current data collection on small businesses and small farms, via financial institutions’ call reports, doesn’t capture all small-business loans and may include data on some loans to large entities. It recommended that the agencies reevaluate the current reporting and make any revisions necessary to better reflect lending to small businesses.
GAO noted specifically that the definition of small business loans used for banks’ reporting excludes loans greater than $1 million and has not been adjusted for inflation since 1992. In addition, the data capture loans by their size rather than the size of the borrowing entity, and therefore could include small loans to large businesses. It said these limitations hamper regulators’ and policymakers’ ability to assess actual changes in banks’ small business lending, including any effect of regulation.
The request for comments seeks input on a series of questions related to the data banks and savings associations internally report and collect regarding small businesses and small farms; the current collection; alternate approaches; and potential challenges and burden.
Comments are due Dec. 16.
FDIC FIL-16-2019
Federal Register notice