A recent poll is showing that a strong majority of entrepreneurs and small business owners believe that Wall Street should be held accountable for the financial practices that caused the financial crisis in recent years, through tougher rules, regulations, and enforcement. The poll results were based on an Internet survey of 500 small business owners across the country, conducted by Lake Research Partners for Small Business Majority, from January 9-16.
The poll found that almost 6 out of 10 entrepreneurs agree that for far too long, Wall Street banks and financial companies wrote their own rules, which have left small businesses and consumers financially vulnerable. Due to this, 84% of the entrepreneurs polled said that they support the Consumer Financial Protection Bureau, or CFPB, and believe that it is needed to prevent predatory financial practices and ensure all financial institutions treat small businesses and consumers fairly.
By a two-to-one ratio, small business owners who responded agreed that the CFPB should maintain independent funding so that financial industry lobbyists cannot block its work when it makes decisions they do not like. Small Business Majority CEO, John Arensmeyer, said in a statement that “Small businesses, along with our economy, are getting stronger, but they’re certainly not immune to the lingering effects of our financial meltdown.” He went on to say that predatory lending practices are still a problem, and that small businesses support the government’s and the CFPB’s role in fixing that.
Small businesses also 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. The poll found a strong link between small business finance and personal credit. 58% of small business owners said they have used a personal credit card to finance their business and 53% have personally guaranteed a loan for their business.
Shaundell Newsome, president and CEO of Sumnu Marketing in Las Vegas, stated that more work needs to be done to give small businesses the ability to push back against unfair financial practices. He said that a lot of small businesses don’t have the power or the resources to fight against the big banks and financial companies, whose practices, according to Newsome, haven’t changed since the recession.
Zachary Davis, owner of Penny Ice Creamery in Santa Cruz, CA, said he learned that “credit card companies will do anything” to maximize fees to make money. He said he relied on his personal credit card because his business was a startup “with no credit history” and his card issuer would register deposits after posting charges and collecting fees if the account was overdrawn. Davis said that having a partner to hold financial institutions accountable is critical, and this is why the CFPB is important.
Davis and Newsome aren’t alone in their concerns about how financial institutions do business. The poll found that 37% of entrepreneurs reported having firsthand experience with a bank or other financial institution processing their bank transactions in a way that maximizes fees. Results said 9 in 10 entrepreneurs support regulations to explicitly bar banks from doing this, and instead require them to process transactions neutrally. Ultimately, entrepreneurs and small business owners say that Wall Street and financial companies must be held accountable, and their business dealings must be transparent.
Small Business Majority “Opinion Poll: Small Businesses Support Strong Accountability for Financial Industry”poll 1/29/13
Debevec, Nicole “Poll: Small businesses want transparency” 2/3/13
Cohn, Michael “Small Business Favor Tougher Financial Enforcement” 1/30/13