GAO report assesses effects of regulation on community banks, small business lending

This story appeared in Bank Digest.                                     

The Government Accountability Office has issued a report assessing the effects of regulatory changes since 2010 on community banks and small business lending. The GAO's analysis found that the regulatory environment likely had a generally modest effect on various aspects of community banks and their small business lending since 2010, although the report said the data banks report to regulators have characteristics that make it difficult to determine how community banks' small business lending changed during this period. Specifically, according to the GAO, the data community banks report to regulators do not accurately capture lending to small businesses because the data exclude some loans to small businesses and could include small loans to large businesses. 

The GAO made three recommendations to banking regulators to reevaluate and modify, as needed, the data they collect to measure small business lending.