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By Jeff Bater
Aug. 23 — Democratic presidential nominee Hillary Clinton is promising to curb regulation on banks, and she signaled support for the fintech sector in a blueprint meant to boost small business.
Clinton’s post on LinkedIn, with an accompanying fact sheet, outlined how to make it easier for small businesses to secure financing and also file taxes.
Small-business loans comprised just 29 percent of total bank loans in 2012, compared with 51 percent in 1995, according to the fact sheet. Clinton vowed to fight to expand small businesses’ access to capital.
“My plan will reduce unnecessary regulations on local community banks and credit unions, while defending tough the new rules on big Wall Street banks,” she said. “And we’ll make it a priority to expand access to credit and capital for underserved communities.”
Aside from reducing regulation on small banks, the fact sheet said Clinton would “harness the potential of online lending platforms and work to safeguard against unfair and deceptive lending practices.”
Clinton's reference to fintech comes as marketplace lenders enjoy a rising profile while undergoing evaluation by regulators. A former official with the Office of the Comptroller of the Currency (OCC) told Bloomberg BNA in a June interview that federal bank regulators likely will balance their support for technological innovation in financial services with a hefty dose of safety-and-soundness-based caution (111 BBD, 6/9/16). Julie Williams, former OCC chief counsel now at Promontory Financial Group in Washington, said the regulatory community is seeing “a very conspicuous manifestation” of innovation in finance and that it is presenting “a new generation of regulatory challenges.”
The Clinton campaign fact sheet reiterated that she will promote the 100 percent tax exclusion on capital gains for long-term small-business investments. Clinton also said she would expand access to credit in underserved communities, partly by doubling support for community development financial institutions. She also proposed giving the administrator of the Small Business Administration the authority to continue providing 7(a) loan guarantees to small businesses if demand is higher than the yearly cap, helping even more small businesses get affordable bank loans.
The National Federation of Independent Business suggested Clinton's blueprint fell short. “On the one hand, we’re pleased that Secretary Clinton is focused on small business,” said Jack Mozloom, media communications director of the industry group. “Some of the elements of her plan would be helpful to small business, including the provision allowing $1 million expensing.
“On the other hand, it avoids the larger and more important conversation about comprehensive tax reform,” Mozloom added. “Tweaking the tax code isn’t a substitute for lower rates, fewer brackets and a lot less complexity.”
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